CASTRO

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

TOWNSHIP OF LAKEWOOD, et

al., Case No. 15–cv–06325–ESK–SAK

Plaintiffs,

v. OPINION

JULIAN CASTRO, Secretary,

United States Department of

Housing and Urban

Development,1

Defendant.

KIEL, U.S.D.J.

After a decade of protracted litigation, the parties come before the Court

seeking to resolve a single issue. Is plaintiff Lakewood Tenants Organization,

Inc. (LTO) a public housing agency as defined in the Housing Act? I conclude

that—because LTO has administered co-plaintiff Township of Lakewood’s

(Lakewood) Section 8 program for nearly 50 years—it is. The consequence of

this determination and plaintiffs’ allegations of bias and selective enforcement

are for another day and another decision. Accordingly, HUD’s motion for a

determination that LTO is a public housing agency (HUD Mot.) will be granted.

1 Julian Castro served as the Secretary of the United States Department of

Housing and Urban Development (HUD) at the time the amended complaint was filed.

(ECF No. 30.) Adrianne Todman served in that role at the time of the pending motion.

(ECF No. 204 (HUD Mot.).) Scott Turner now serves as HUD Secretary. HUD’s

Secretary, U.S. Dep’t of Hous. and Urb. Dev., https://www.hud.gov/aboutus/secretary

(last visited Jan. 20, 2026). Turner is substituted as defendant pursuant to Federal

Rule of Civil Procedure 25(d), which provides that a public officer is automatically

substituted by their successor when they cease to hold office. See Fed. R. Civ. P. 25(d);

Spence v. Foxx, 159 F. Supp. 3d 483, 487 n. 1 (D.N.J. 2014) (substituting the former

Secretary of Transportation with his successor).

I. BACKGROUND

The procedural and factual history of this case is long and complex. The

question presented is narrow. The Court presumes the parties’ familiarity

with the underlying facts of this case and references them only as necessary to

resolve the limited pending issue.

A. The Amended Complaint

1. Lakewood’s Section 8 Program

Lakewood is a municipality created by the New Jersey Legislature in

March 1892. (ECF No. 30 p. 7.) Relevant to the amended complaint, but not

necessarily the pending motion, Lakewood is home to a large Orthodox Jewish

population. (Id.) Section 8 of the Housing Act includes the Housing Choice

Voucher Program in which HUD enters into annual contributions contracts

with public housing agencies. (Id. p. 9.) The public housing agencies in turn

enter into contracts with dwelling owners for the purpose of having units rented

to low-income families with a portion of the rental payments provided by the

federal government. (Id.)

LTO is a nonprofit corporation founded in 1970 to serve Lakewood renters.

(Id. pp. 7, 9, 10.) In 1977, HUD requested that Lakewood participate in the

Housing Choice Voucher Program and Lakewood and HUD entered into an

annual contributions contract. (Id. p. 9.) That same year, Lakewood and LTO

entered into a contract to administer Lakewood’s Housing Choice Voucher

Program—known as the Lakewood Township Residential Assistance Program

(LTRAP)—with LTO serving as an independent contractor. (Id. pp. 2, 9.)

Lakewood and LTO sought HUD approval of their contract in August 1977, but

HUD responded that its approval was not required. (Id. p. 10.) Contracts

between HUD and Lakewood and Lakewood and LTO have continued while

LTRAP expanded from 80 to 1,140 units. (Id.) Each year, Congress

establishes the administrative fees deemed reasonable and necessary to

manage Section 8 programs and Lakewood and LTO’s contract sets out that

LTO will perform all management and administrative functions and receive the

full fee in return. (Id.) This course has continued for decades with HUD’s

knowledge, including in the submission of contracts and financial statements.

(Id. pp. 10, 11.)

2. Mr. N and Initial Investigations

LTO was notified on August 31, 2011 that a tenant—referred to in the

amended complaint as “Mr. N”—was simultaneously collecting subsidies from

LTO and another entity. (Id. p. 11.) Following an investigation, LTO notified

Mr. N that his LTRAP voucher had expired, consistent with HUD procedures

in which the more recent of two subsidies is discontinued in like instances. (Id.

pp. 11, 12.) In an apparent response, HUD sent a letter to LTO on November

28, 2011 expressing concern about LTRAP’s success rate in issuing vouchers

and demanding production of information, to which LTO complied. (Id. p. 12.)

Mr. N filed a formal housing discrimination complaint with HUD on

August 8, 2012. (Id. p. 13.) LTO responded to the complaint and cooperated

during HUD’s eight-month investigation. (Id.) LTO also responded to Mr.

N’s amended complaint filed in early 2013. (Id. pp. 13, 14.) Approximately 15

HUD agents conducted an onsite investigation at LTO offices on May 29 and

30, 2013 during which nine of LTO’s 18 employees were questioned. (Id. p. 14.)

During the questioning, which the amended complaint characterizes as

“[i]nterrogations,” HUD officials allegedly made antisemitic remarks and

questioned LTO employees about their religious observances. (Id. pp. 14, 27,

28.) The general implication was that LTO personnel were untrustworthy due

to their faith. (Id. pp. 14, 28.)

HUD officials demanded Mr. N’s reinstatement, to which LTO refused,

and LTO’s counsel requested either a written demand from HUD Newark’s Fair

Housing and Equal Opportunity (FHEO) Division or a written directive from

HUD Newark’s Public and Indian Housing Management Division. (Id. p. 15.)

No written demand or directive were issued. (Id.) On June 3, 2013, the

FHEO enforcement chief wrote to LTO’s counsel demanding additional

document productions, the contents of LTO’s Section 8 participant and waiting-

list files, a list of office holidays, and a list of LTO board members from 2010 on

including name, race, national origin, sex, and disability status. (Id.) The

letter also advised that HUD would require another two-day onsite visit to

interview remaining staff and review additional documents. (Id. p. 16.)

LTO’s counsel responded in a June 12, 2013 letter that Mr. N’s complaint

did not justify HUD’s demands. (Id.) On August 23, 2013, HUD’s Fair

Housing Region II director notified LTO that HUD was launching a compliance

review to determine whether LTO was compliant with Title IV, Section 504 of

the Rehabilitation Act, and the Americans with Disabilities Act. (Id. pp. 16,

17.) The August 23, 2013 letter also made additional information requests and

notified LTO that HUD would conduct another onsite inspection with

additional documents to be reviewed. (Id. pp. 17, 18.)

3. Further Investigation into LTO

Practices

Plaintiffs allege that HUD’s investigations went beyond the Mr. N

complaints and into internal practices that are relevant to the instant motion.

(See id. pp. 19–27.) Pursuant to LTO’s contract with Lakewood, LTO is

compensated at the administrative fee set by Congress. (Id. p. 19.) Public

housing agencies are required to establish reserve accounts for when

administrative fees exceed costs to cover subsequent shortfalls. (Id. p. 21.)

Lakewood never has a surplus or deficit because its cost is the fee established

by Congress. (Id.) In an August 9, 2011 email to LTO, HUD confirmed that

reserve accounts—known as unrestricted net positions—should be reported as

zero. (Id.) Further, the administrative fees paid from public housing

agencies to subcontractors have long been recognized as “defederalized” once

paid and are thus no longer subject to audit. (Id. p. 22.) HUD had not sought

to audit LTO’s internal books from 1977 to 2013, but rather reviewed LTRAP’s

books, ledgers, and other records. (Id. p. 23.)

In a July 25, 2013 email, HUD stated that it would conduct an onsite

financial management review designed to validate balances maintained in

LTO’s reserve accounts. (Id.) The onsite review took place over two days in

September 2013. (Id. p. 24.) LTO addressed HUD’s concerns with the

exception of HUD’s interest in investigating LTO’s unrestricted net position

through an onsite audit. (Id. p. 25.) As HUD’s efforts continued, LTO sought

the opinions of legal and accounting professionals, all of whom allegedly agreed

that funds become defederalized once paid from the public housing agency to

the subcontractor. (Id. p. 26.) HUD, further, may not audit or regulate the

accounts of subcontractors. (Id.)

4. HUD’s Threatened Termination of

LTRAP

In a December 5, 2014 letter, HUD threatened to terminate the contract

for LTRAP if LTO failed to submit to an audit of its internal books and records.

(Id. p. 27.) Plaintiffs’ counsel met with HUD representatives by telephone on

February 10, 2015 and understood that HUD and plaintiffs would work toward

a resolution. (Id. p. 28.) This understanding was memorialized in an email

from plaintiffs’ counsel to HUD’s counsel dated February 17, 2015. (Id. p. 29.)

Nonetheless, on August 7, 2015, Lakewood’s mayor was contacted by the

field office director of HUD’s Newark office and advised that HUD would be

transferring Lakewood’s program to the Lakewood Housing Authority. (Id.)

A termination letter, dated August 11, 2015, stated that Lakewood was in

default of its annual contributions contract. (Id. pp. 29, 30.) As a result of the

default, HUD was to take control of LTRAP and transfer it to the Lakewood

Housing Authority effective September 1, 2015. (Id. p. 30.) The letter sought

to terminate Lakewood’s rights under the annual contributions contract and—

by extension—terminate LTO’s rights under the subcontract and affect

participating LTRAP beneficiaries and landlords. (Id.) In a separate letter

dated August 12, 2015, HUD Newark’s director of the Office of Public Housing

demanded the transfer of all current and historic program documents to the

Lakewood Housing Authority. (Id.)

Plaintiffs allege that the Lakewood Housing Authority—whose executive

director is not Jewish—possesses an inferior record as compared to LTRAP.

(Id. p. 31.) Shutting down LTRAP and transferring the program to the

Lakewood Housing Authority would be an injustice fueled by antisemitism,

according to plaintiffs. (Id. p. 32.)

B. Procedural History

Plaintiffs filed suit on August 21, 2015, alleging violation of due process

and equal protection. (ECF No. 1.) Soon after, plaintiffs moved for an order

to show cause preventing HUD from terminating LTRAP. (ECF No. 4.) On

August 28, 2015, District Judge Michael A. Shipp signed a stipulation and

consent order whereby the parties agreed to maintain “the status quo until the

Court issues a final order on the Parties’ cross[-]motions for summary

judgment.” (ECF No. 10 (Aug. 28, 2015 Order) pp. 3, 4.) An expedited

schedule for cross-motions for summary judgment was to be completed within

120 days. (Id. p. 4.) The consent order also stated that HUD had agreed not

to seek to take possession of LTRAP or otherwise act pursuant to its August 11,

2015 asserted findings of Lakewood’s alleged breach of the annual contributions

contract until after the cross-motions were decided. (Id. p. 2.) The parties

acknowledged the Court’s authority to adjudicate all matters at issue. (Id.

p. 1.)

HUD answered (ECF No. 13) and moved to preclude discovery beyond the

administrative record (ECF No. 18). The motion was adjourned multiple times

(ECF No. 20; ECF No. 22; ECF No. 25) before ultimately being administratively

terminated by Magistrate Judge Douglas E. Arpert (Ret.) on February 18, 2016

(ECF No. 27). The operative amended complaint followed on April 8, 2016, in

which plaintiffs again asserted claims of breach of contract and violations of

due process, equal protection, and the Administrative Procedures Act and

added a count for alleged violation of the Religious Freedom Restoration Act.

(ECF No. 30 pp. 33–44.)

On November 25, 2020, HUD moved for an order clarifying the scope of

the August 28, 2015 consent order or, alternatively, to vacate it pursuant to

Federal Rule of Civil Procedure 60(b)(6). (ECF No. 132.) The motion was

preceded by HUD’s administrative enforcement action against Lakewood, LTO,

and LTO’s executive director asserting that the executive director’s salary

exceeded the regulatory limit. (ECF No. 132–1 p. 16.) HUD argued that the

consent order contemplated summary judgment motion practice within 120

days and no such motions had been filed after five years. (Id. pp. 7, 8.)

Further, the amended complaint’s addition of new plaintiffs and allegations

expanded the scope of the case beyond what was contemplated at the time of

the order. (Id.) District Judge Brian R. Martinotti administratively

terminated the motion in a July 13, 2021 order and directed HUD to request a

stay of the administrative enforcement action. (ECF No. 159 (July 13, 2021

Order).)

The case proceeded on with discovery and related disputes. On March

28, 2024, the case was reassigned to me. (ECF No. 189.) Magistrate Judge

Sharon A. King held a settlement conference with the parties on September 10,

2024 (ECF No. 199) followed by a status conference on September 24, 2024 (ECF

No. 202). Following the status conference, Judge King entered an order in

which she stated that resolution of the issue of whether LTO is a public housing

agency “would conserve judicial resources and serve the best interests [of] the

parties.” (ECF No. 203 (Sept. 25, 2024 Order).) Judge King set forth a

briefing schedule for the contemplated motion and stayed discovery pending its

adjudication. (Id.)

The pending motion followed (HUD Mot.), to which plaintiffs filed an

opposition (ECF No. 207 (Pls.’ Opp’n Br.)), HUD filed a reply (ECF No. 212

(HUD Reply Br.)), and plaintiffs filed a sur-reply (ECF No. 213 (Pls.’ Sur-Reply

Br.)).

II. STANDARD AND PARTY ARGUMENTS

A. The Housing Act

The Section 8 Housing Choice Voucher Program was created in 1974.

Hayes v. Harvey, 903 F.3d 32, 36 (3d Cir. 2018). The program is funded by

HUD and administered by local public housing agencies. Id. The tenant-

based assistance offered by the program is implemented whereby a tenant

family selects an eligible unit and the applicable public housing agency

thereafter contracts with the property owner to make rental assistance

payments. Id.

Status as a public housing agency is associated with HUD budget approval

and a host of regulatory requirements. Hargrove v. Pleasantville Hous. Auth.,

Case No. 19–01162, 2019 WL 6712308, at *4 (D.N.J. Dec. 10, 2019). Relevant

to HUD’s August 11, 2015 termination letter, these requirements include

recordkeeping and HUD access to accounts and other records. See 24 C.F.R.

§ 982.158.

The instant dispute focuses on whether LTO is a public housing agency.

The Housing Act defines a public housing agency as “any State, county,

municipality, or other governmental entity or public body (or agency or

instrumentality thereof) which is authorized to engage in or assist in the

development or operation of public housing, or a consortium of such entities or

bodies as approved by the Secretary.” 42 U.S.C. § 1437a(b)(6)(A). For the

purpose of a Section 8 tenant-based assistance program, public housing agency

also includes

any other public or private nonprofit entity that, upon the

effective date under section 503(a) of the Quality Housing

and Work Responsibility Act of 1998, was administering

any program for tenant-based assistance under section

1437f of this title (as in effect before the effective date of

such Act), pursuant to a contract with the Secretary or a

public housing agency ….

Id. § 1437a(b)(6)(B)(ii).

HUD regulations offer similar definitions of a public housing agency. 24

C.F.R. § 982.4(b). These include “[a]ny State, county, municipality, or other

governmental entity or public body which is authorized to administer the

program (or an agency or instrumentality of such an entity)” and “[a]ny other

public or private non-profit entity that was administering a Section 8 tenant-

based assistance program pursuant to a contract with the contract

administrator of such program (HUD or a [public housing agency]) on October

21, 1998.” Id.

B. Statutory Interpretation

HUD’s motion requires the Court to interpret provisions of the Housing

Act. Matters of statutory interpretation are questions of law. LD Gelato LLC

v. Hartford Underwriters Ins. Co., Inc., 676 F. Supp. 3d 317, 323 n. 7 (D.N.J.

2023). Courts interpreting a statute must begin with its text. Dorman v.

Computer Credit, Inc., 154 F. Supp. 3d 126, 130 (D.N.J. 2015). “[W]hen the

statutory language is clear and unambiguous, the legislature’s intent is best

divined by reference to the plain meaning of a statute.” Hirschfeld v. Beckerle,

405 F. Supp. 3d 601, 607 (D.N.J. 2019) (quoting Sery v. Fed. Bus. Centers, Inc.,

365 F. App’x 396, 397 (3d Cir. 2010)). Courts look not only at the particular

language at issue, but the structure of the section and the design and objective

of the statute. See id. “When ‘the statute’s language is plain,’ the court’s

inquiry must end, as ‘the sole function of the courts is to enforce it according to

its terms.’” Id. (quoting United States v. Ron Pair Enters., Inc., 489 U.S. 235,

241 (1989)).

C. Party Arguments

1. HUD

HUD first argues that LTO meets the definition of a public housing agency

under 42 U.S.C. § 1437a(b)(6)(B) and 24 C.F.R. § 982.4(b) because it is a

nonprofit entity that has been administering a Section 8 program pursuant to

a contract with Lakewood since 1977. (ECF No. 204–1 pp. 14–16.) LTO also

fits the definition of a public housing agency as an agency or instrumentality of

Lakewood pursuant to 42 U.S.C. § 1437a(b)(6)(A) and 24 C.F.R. § 982.4(b),

according to HUD. (Id. pp. 16–25.) Lakewood and LTO’s contract states that

LTO is the designated agency tasked with administering Lakewood’s Section 8

program. (Id. pp 18, 19.) Letters and representations dating back to 1996

also support the position that LTO is an agency or instrumentality and HUD

has understood LTO to be serving that function. (Id. pp. 20–23.)

In its reply, HUD argues that prior orders entered in this case do not

preclude the Court from finding that LTO is a public housing agency. (HUD

Reply Br. pp. 5–8.) Judge King requested the parties’ briefing on the issue and

HUD’s compliance cannot be interpreted as bad faith. (Id. p. 7 n. 1.) The

Housing Act plainly includes in its definition of public housing agencies

nonprofits that were administering a Section 8 program pursuant to a contract

with a public housing agency as of October 21, 1998. (Id. p. 9.) LTO was not

pressed into service, but rather designated itself as a public housing agency by

way of its contract with Lakewood. (Id.) The regulations cited by plaintiffs

do not address whether an entity may become a public housing agency by

operation of statute, do not set forth the process necessary to become a public

housing agency, and are superseded by statute to the extent that they are

inconsistent. (Id. pp. 11, 12.) Plaintiffs’ factual arguments are also to no

avail, according to HUD. (Id. pp. 13–15.) For instance, 42 U.S.C.

§ 1437a(b)(6)(B) clearly provides that a public housing agency may be a

nonprofit contracting with another public housing agency and the fact that

HUD may not have sought to audit or declare other entities public housing

agencies is irrelevant. (Id. p. 13.)

2. Plaintiffs

Plaintiffs submit that the Court need not consider the substance of HUD’s

motion because multiple orders have already addressed the issue of whether

LTO may be deemed a public housing agency. (Pls.’ Opp’n Br. pp. 8–13, 32–

37.) These include the August 28, 2015 consent order maintaining the status

quo that LTO not be considered a public housing agency and Judge Martinotti’s

July 13, 2021 order directing HUD to seek a stay in its administrative

enforcement action. (Id. pp. 9–13.) Consent orders have the effect of

judgments, according to plaintiffs, and there is no reason to reconsider or set

aside the cited orders. (Id. pp. 32–37.)

On the merits, HUD’s arguments as to the plain language of 42 U.S.C.

§ 1437a and 24 C.F.R. § 982.4 are misplaced, according to plaintiffs, because a

law cannot be interpreted as automatically converting a private entity to a

public one. (Id. pp. 38–40.) The cited language is better understood as what

entities could be public housing agencies as opposed to those that are. (Id.)

At the very least, HUD’s plain-language argument should be rejected because

the language is not plain. (Id. p. 41.) HUD’s own Handbook sets forth a

variety of submissions needed to become a public housing agency that would be

unnecessary if an agency could automatically become one. (Id. pp. 43, 44.)

Plaintiffs add that the Housing Act prohibits the changing of the legal status of

a public housing agency and HUD’s interpretation of 24 C.F.R. § 982.4 is not

entitled to deference due to the inconsistent positions it has taken. (Id. pp. 43–

46.)

Plaintiffs, in their sur-reply, accuse HUD of side-stepping its status-quo

argument and emphasize that the status quo is that LTO is not a public housing

agency. (Pls.’ Sur-Reply Br. p. 4.) HUD does not dispute that LTO has not

been a public housing agency since 1977, HUD has approved of LTO’s

arrangement with Lakewood, and that status quo was disrupted in August 2015

when HUD sought to assert that LTO is a public housing agency—leading to

this suit. (Id. pp. 4, 5.) The status quo is preserved by the parties’ consent

order and the arguments raised by HUD here were rejected by Judge Martinotti

in his July 13, 2021 order. (Id. pp. 5, 6.) LTO and Lakewood’s business

arrangement did not change following the effective date of the Quality Housing

and Work Responsibility Act of 1998 and HUD had not attempted to place

public-housing-agency requirements on a subcontractor until its recent efforts

directed at LTO in 2014. (Id. pp. 8–13.) HUD has “flip-flopped” in its

position, according to plaintiffs, and ignored applicable regulations “to further

its preordained agenda to shut down [Lakewood’s] program.” (Id. pp. 12–15.)

III. DISCUSSION

A. The Court’s Prior Orders

A district court may adjudicate whether an agreement between the

parties, incorporated into an order, has been breached. Jackson v. Seifried,

Case No. 20–17410, 2023 WL 4627815, at *10 (D.N.J. July 9, 2023)). The scope

of a consent order is determined by examining the terms within its four corners.

Id. Courts must limit themselves to the order’s terms. Id.

A court’s first objective in reviewing a consent order is to determine

whether the instant dispute is unambiguously covered by the order’s terms.

See Democratic Nat’l Comm. v. Republican Nat’l Comm., Case No. 81–03876,

2016 WL 6584915, at *12 (D.N.J. Nov. 5, 2016) (referring to consent decrees).

The parties are bound by the objective meaning of the terms used and courts

may not strain that meaning or impose other terms to reconcile the order with

their own understanding of its purpose. See id.

Against this backdrop, I conclude that the orders cited by plaintiffs do not

serve as a bar to a finding that LTO is a public housing agency. As an initial

matter, the pending motion was not prompted by HUD. Rather, it was Judge

King who ordered HUD to “file a motion seeking a determination as to whether

LTO is a [public housing agency].” (Sept. 25, 2024 Order.)

More to the point, plaintiffs overstate the scope of the August 28, 2015

consent order and Judge Martinotti’s July 13, 2021 order. The consent order

acknowledged that the Court could adjudicate all matters at issue. (Aug. 28,

2015 Order p. 1.) It also noted that HUD had agreed not to seek to take

possession of LTRAP or “otherwise take any action based on HUD’s August 11,

2015, asserted findings of the Township of Lakewood’s breach of its Annual

Contributions Contract” until the parties’ cross-motions for summary judgment

were ruled on. (Id. p. 2.) HUD does not seek to take possession of LTRAP as

part of the instant motion and such relief will not be granted here.

Insofar as plaintiffs lean on the “otherwise take action” language in the

order, the August 11, 2015 letter asserted HUD’s authority to take possession

of LTRAP based on its determination that Lakewood was in default of its

annual contributions contract for failure to comply with recordkeeping and

disclosure requirements. (ECF No. 4–1 pp. 21–23.) This determination was

premised, in part, on HUD’s earlier conclusion that Lakewood and LTO

together constituted a public housing agency. (Id. p. 22.) Again, the instant

motion does not seek—and I will not enter in response to the present motion—

an order permitting HUD to take possession of LTRAP or otherwise act on its

position that Lakewood was in default and failed to comply with regulatory

requirements.

Nowhere within the four corners of the consent order is HUD prevented

from merely seeking a ruling that LTO is a public housing agency. See

Jackson, 2023 WL 4627815, at *10. Nor is the position that LTO is not a public

housing agency—as opposed to LTO’s continued operation of LTRAP—

unambiguously part of the status quo. Therefore, the consent order’s terms do

not “unambiguously cover the dispute in question.” Democratic Nat’l Comm.,

2016 WL 6584915, at *12 (quoting United States v. New Jersey, 194 F.3d 426,

430 (3d Cir. 1999)).

Likewise, Judge Martinotti’s July 13, 2021 order merely directed HUD to

request a stay of its administrative enforcement action pending the resolution

of this case. (July 13, 2021 Order.) HUD does not now ask, and I will not now

order in response to the present motion, that the stay be lifted and for the

administrative action to proceed.

Accordingly, a determination that LTO is a public housing agency does not

disturb the status quo that has been in effect since the entry of the consent

order. (Aug. 28, 2015 Order pp. 3, 4.) Whatever effect such a determination

may have, HUD is prohibited from acting on it until the Court issues its order

in response to the parties’ contemplated cross-motions for summary judgment.

(Id. p. 4.) In the meantime, LTO may continue operating as it has in the decade

since the consent order was entered. A determination that LTO is a public

housing agency no doubt would be adverse to plaintiffs’ stated position and

would impact the parties’ summary judgment briefing. However, I agree with

Judge King that determination of that issue will “conserve judicial resources

and serve the best interests [of] the parties” from now to the resolution of the

case. (Sept. 25, 2024 Order.) I will thus advance to the merits of HUD’s

motion.2

B. Public Housing Agencies

I turn to the statutory text and begin with 42 U.S.C. § 1437a(b)(6)(B). As

described above, § 1437a(b)(6)(B) states that, for the purposes of the program

for tenant-based assistance under Section 8, the term “public housing agency”

includes three definitions. § 1437a(b)(6)(B). Among them is “any other public

or private nonprofit entity that, upon the effective date under section 503(a) of

the Quality Housing and Work Responsibility Act of 1998, was administering

any program for tenant-based assistance under section 1437f … pursuant to a

contract with … a public housing agency.” § 1437a(b)(6)(B)(ii).

The common definition of the term “include” is “[t]o contain as a part of

something.” Include, Black’s Law Dictionary (12th ed. 2024). The term

“suggests that Congress intended to illustrate a broad concept rather than

narrowly circumscribe a term with exclusive categories.” Singh-Kaur v.

Ashcroft, 385 F.3d 293, 298 (3d Cir. 2004) (referring to “including”).

Clear enough. There is no dispute that LTO is a nonprofit entity that (1)

administers Lakewood’s Section 8 program and (2) has done so since 1977.

(ECF No. 30 p. 2; ECF No. 204–12.) Lakewood itself is a public housing agency.

2 Plaintiffs also refer to Judge Martinotti’s opinion and order (ECF No. 65; ECF

No. 66) denying HUD’s motion for judgment on the pleadings (Pls.’ Opp’n Br. p. 10).

HUD argued as part of that motion that Lakewood, not LTO, was a public housing

agency. (Id.) HUD has now “flip-flopped” its position, according to plaintiffs. (Id.)

Plaintiffs do not cite to a specific argument then-made by HUD and HUD’s motion brief

supporting its motion for judgment on the pleadings cited an April 14, 2014 letter

stating that LTO and Lakewood together constituted a public housing agency. (ECF

No. 43–1 p. 11 n. 1) HUD contended that “the distinction between the Township of

Lakewood, LTO, and LTRAP is one without a difference.” (Id.) Even accepting

plaintiffs’ assertion, I find—as stated below—that plaintiffs’ arguments of bias and

arbitrary enforcement are better suited for summary judgment.

(ECF No. 30 p. 2.) Therefore, LTO meets § 1437a(b)(6)(B)(ii)’s definition of a

public housing agency.3

This would be a misreading, according to plaintiffs. Rather, the more

reasonable interpretation of “includes” is permissive: what entities may be a

public housing agency rather than what entities are or must become a public

housing agency. (Pls.’ Opp’n Br. p. 38.) For instance, plaintiffs read “a [public

housing agency] can be a non-profit …” or “a [public housing agency] can be any

one of the following …” into § 1437a(b)(6)(B). (Id. (emphasis added).) Of

course, such permissive language does not appear in § 1437a(b)(6)(B) and

plaintiffs cite to no basis for reading such language into the statute.

Rather, “includes” is an expansive term. See Coyoy v. United States, 526

F. Supp. 3d 30, 37 (D.N.J. 2021) (“Logically, ‘including’ is not a term of

exclusion; it means the same thing as the cautious contract drafter’s ‘including

but not limited to.’”). While courts do not necessarily read language

proceeding “including” language as exhaustive, “[e]xhaustive or not, ‘including’

phrases list items that are part of the defined class.” Anderson v.

Diamondback Inv. Grp., LLC, 117 F.4th 165, 192 n. 4 (4th Cir. 2024)

(Richardson, J., concurring). Plaintiffs prefer to read “includes” as

“includable” by insisting that the § 1437a(b)(6)(B) is most reasonably read with

permissive, qualifying language such as “can.” I disagree and find that the

statute is most reasonably read by giving effect to Congress’s decision to not

3 This conclusion is consistent with those of state attorneys general. See La.

Att’y Gen. Op. No. 17–0123 (Jan. 9, 2018), 2018 WL 547288, at *3 (noting that the

Housing Act’s definition of a “‘public housing agency’ is expanded to include three

additional definitions for purposes of the Section 8 Program” including “any public or

private nonprofit entity previously administering a program for tenant-based

assistance upon the effective date of the Quality Housing and Work Responsibility Act

of 1998”); Or. Att’y Gen. Op. No. OP–2011–2 (Oct. 5, 2011), 2011 WL 4945925, at *4

(finding that federal law could authorize entities to act as public housing agencies and

that § 1437a(b)(6)(B)(ii) is an example of such a law).

include qualifying language. See United States v. Uriarte, 975 F.3d 596, 604

(7th Cir. 2020) (interpreting Section 403 of the First Step Act of 2018 and

concluding that Congress did not qualify the statute’s terms “because it clearly

applied to all defendants awaiting a valid sentence at the time of its

enactment”); see also Patterson v. Ga. Pac., LLC, 38 F.4th 1336, 1347 (11th Cir.

2022) (“Because Congress did not qualify the word ‘any,’ it means ‘all.’”).4

Plaintiffs add as part of their argument that the Housing Act cannot be

interpreted as granting the power to transform a private entity into a public

agency against its will and “by fiat.” (Pls.’ Opp’n Br. p. 38.) This argument

ignores LTO’s own exercise of its will in choosing to maintain its contractual

relationship with Lakewood, itself a public housing agency, for nearly 50 years.

(ECF No. 30 p. 10.) I presume plaintiffs’ familiarity with statutes and

regulations applicable to LTO’s administration of LTRAP, including

§ 1437a(b)(6)(B)(ii).5 Designation as a public housing agency is associated with

various obligations and requirements. Hargrove, 2019 WL 6712308, at *4.

Among them are government access to internal books and records. See 24

C.F.R. § 982.158. Plaintiffs believe that LTO may avoid this sort of oversight

4 This reading is based on the plain meaning of § 1437a(b)(6)(B)’s text. The

parties do not direct me to any materials, such as legislative history, with which to

further interpret Congress’s intent. In any event, such materials would be unable to

override the plain meaning of the statute. See S.H. ex rel. Durrell v. Lower Merion

Sch. Dist., 729 F.3d 248, 259 (3d Cir. 2013).

5 Among HUD’s motion exhibits is a June 19, 1996 letter written by LTO’s

counsel to HUD’s Assistant Secretary for Public and Indian Housing. (ECF No. 204–

16.) LTO’s counsel asserted that LTO was an agency of Lakewood and sought a letter

from HUD clarifying that LTO is a public housing agency. (Id. pp. 4, 5.) On July 9,

1996, the acting assistant secretary wrote to LTO’s executive director stating that

“LTO qualifies as a public housing agency” under the Housing Act. (ECF No. 204–

22.) I do not rely on these correspondences in considering the pending motion. They

do, however, exhibit LTO’s understanding that whether it may be deemed a public

housing agency could turn on its relationship with Lakewood.

by treating Lakewood as a sort of pass-through entity whereby Lakewood

accepts the responsibility of administering LTRAP and associated funds from

HUD and immediately transfers all of both to LTO whereafter HUD’s typical

oversight is extinguished. I am unpersuaded that such an arrangement is

contemplated by the Housing Act.

I similarly find unavailing plaintiffs’ position that LTO cannot be a public

housing agency because it has not satisfied various regulatory requirements.

(Pls.’ Opp’n Br. p. 43; Pls.’ Sur-Reply Br. p. 12.) These include the

requirements that a public housing agency pass enabling legislation and

contract with HUD. (Id.) Only Lakewood has contracted with HUD. (Pls.’

Opp’n Br. p. 13.)

The regulations cited do not stand for the propositions asserted and are

thus unhelpful to plaintiffs’ case. For instance, plaintiffs cite 24 C.F.R.

§ 982.51 for the proposition that a public housing agency must pass enabling

legislation and submit the opinion of counsel to HUD. (Pls.’ Sur-Reply Br.

p. 12.) However, § 982.51 refers to a public housing agency’s provision of

evidence to HUD that it may administer its program. 24 C.F.R. § 982.51. The

public housing agency applies to HUD for funding and, pursuant to § 982.51,

must submit evidence of its status and authority, including enabling legislation

and a supporting legal opinion. 18 Barbara J. Van Arsdale, et al., Federal

Procedure: Lawyer’s Edition § 44:416 (2025). It is unclear how § 982.51 would

be applicable to a public housing agency that administers a Section 8 program

through a contract with another public housing agency that itself contracts with

HUD. See 42 U.S.C. § 1437a(b)(6)(B)(ii).

Similarly, plaintiffs contend, citing 24 C.F.R. § 982.162, that a public

housing agency must sign a contract with HUD. (Pls.’ Sur-Reply Br. p. 12.)

However, § 982.162 refers to the use of HUD-required contracts and forms. See

Quillinan v. Papavassiliou, Case No. 12–04159, 2013 WL 428604, at *1 n. 3

(N.D. Cal. Feb. 1, 2013) (citing § 982.162 and noting that the Housing Assistance

Project contracts and portions of the lease were required to comport with HUD

specifications); Scott Realty Grp. Tr. v. Charland, 159 N.E.3d 714, 717 (Mass.

App. Ct. 2020) (same).6

Lastly, plaintiffs argue that HUD has never before attempted to apply 42

U.S.C. § 1437a(b)(6) or 24 C.F.R. § 982.4(b) in the manner asserted here and that

HUD’s present arguments represent a “flip-flop” from decades of prior

understanding and practice. (Pls.’ Sur-Reply Br. pp. 11–14.) However, these

arguments—like plaintiffs’ repeated allegations of bias—are not illuminative

for the limited question presented by the motion: whether LTO is a public

housing agency. The terms of 42 U.S.C. § 1437a(b)(6)(B) are unambiguous and

I do not defer to any interpretation made by HUD now or before. Thus

plaintiffs’ arguments that HUD has been arbitrary and selective in its

application of § 1437a(b)(6) may serve as a compelling basis for their motion for

summary judgment. They are of little persuasive value here.

In sum, I find that LTO has administered the Section 8 program of

Lakewood—itself a public housing agency—since 1977. It therefore meets the

definition of a public housing agency under § 1437a(b)(6)(B)(ii). Because I find

that LTO meets the § 1437a(b)(6)(B)(ii) definition of a public housing agency, I

do not consider HUD’s alternative arguments that LTO meets the definition

under § 1437a(b)(6)(A) or 24 C.F.R. § 982.4(b).7

6 Plaintiffs’ opposition also refers to HUD’s Handbook and the materials that

must be submitted in order for an entity to become a public housing agency. (Pls.’

Opp’n Br. p. 43.) Plaintiffs add an excerpt from the Handbook as an exhibit. (ECF

No. 208–1 pp. 282–85.) HUD responds that the cited Handbook predates

§ 1437a(b)(6)(B) and applies only to Section 9 public housing development proposals,

not Section 8 vouchers. (HUD Reply Br. pp. 13, 14.) Plaintiffs do not refer to the

Handbook in their sur-reply.

7 In response, plaintiffs argue, for instance, that HUD’s interpretation of 24

C.F.R. § 982.4(b) is not entitled to deference. (Pls.’ Opp’n Br. pp. 44–46.) Because my

IV. CONCLUSION

For the foregoing reasons, HUD’s motion at ECF No. 204 will be granted.

An appropriate order accompanies this opinion.

/s/ Edward S. Kiel

EDWARD S. KIEL

UNITED STATES DISTRICT JUDGE

Dated: January 22, 2026

decision rests on the statutory definition of “public housing agency,” I need not consider

plaintiffs’ arguments related to the regulatory definition.