Greater New Orleans Fair Housing Action Center v. United States Department of Housing & Urban Development

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 15, 2011 Decided April 8, 2011

No. 10-5257

GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, ET

AL.,

APPELLANTS

v.

UNITED STATES DEPARTMENT OF HOUSING & URBAN

DEVELOPMENT AND ROBIN KEEGAN, IN HER OFFICIAL

CAPACITY AS EXECUTIVE DIRECTOR OF THE LOUISIANA

RECOVERY AUTHORITY,

APPELLEES

Consolidated with 10-5269

Appeals from the United States District Court

for the District of Columbia

(No. 1:08-cv-01938)

A.J. Krouse argued the cause for appellee/cross appellant

Robin Keegan. With him on the briefs were Renee Culotta,

Suzanne M. Risey, and Timothy Heffernan.

Joseph M. Sellers, argued the cause for appellants/cross-

appellees. With him on the briefs were Jenny R. Yang, John

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Payton, Debo P. Adegbile, Renika C. Moore, and Craig

Goldblatt.

Before: ROGERS and KAVANAUGH, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

Opinion concurring in part and concurring in the

judgment filed by Circuit Judge ROGERS.

WILLIAMS, Senior Circuit Judge: The plaintiffs in this

case are two fair housing organizations in New Orleans and

five African-American homeowners. They claim that a

program to help homeowners rebuild after hurricanes Katrina

and Rita has employed a grant formula that violates the anti-

discrimination provisions of the Fair Housing Act, particularly

42 U.S.C. § 3604(a). The program is administered by the

Office of Community Development (“OCD”) of the State of

Louisiana, an entity we treat interchangeably with its

predecessor, the Louisiana Recovery Authority (“LRA”).

Defendant Robin Keegan is the Executive Director of the

OCD. The U.S. Department of Housing and Urban

Development (“HUD”) is a defendant in the suit but has taken

no part in this appeal and cross-appeal.

Plaintiffs sought preliminary injunctive relief, which the

district court initially denied on the ground that it was barred

by state sovereign immunity under the Eleventh Amendment.

Plaintiffs appealed. While the appeal was pending, the district

court granted the plaintiffs’ later request for narrower

injunctive relief. Defendant Keegan cross-appealed. Because

it is plain that there are some potential remedies not running

afoul of sovereign immunity, we have jurisdiction to address

the substantive merits of plaintiffs’ claim (regardless of

3

sovereign immunity’s possible applicability to the injunction

initially sought). Doing so, we find that the plaintiffs’

showing on those merits is too weak to give them the

likelihood of success required for a preliminary injunction.

Accordingly, we affirm the denial of plaintiffs’ initially

requested injunction and reverse the grant of their follow-up

injunctive claim.1

* * *

In 2005 approximately 123,000 owner occupied homes in

Louisiana were destroyed or severely damaged by hurricanes

Katrina and Rita. Deferred Appendix (“D.A.”) 47. Using

federal funds, Louisiana created the Road Home Homeowner

Assistance Program to assist Louisianans displaced by the

hurricanes. The program’s principal activity has been

provision of grants to homeowners who wish to repair or

rebuild and reoccupy their damaged homes. As of March 24,

2011, it had given 117,744 Louisiana homeowners almost $8

billion in grants for rebuilding. Office of Community

Development, The Homeowner Assistance Program Weekly

1

The parties on March 28, 2011, in accord with Part II.C.2 of

the Circuit’s Handbook of Practice, filed notice that they were

engaged in serious settlement negotiations. Notice of such

negotiations is of course most useful before the court has expended

resources in drafting an opinion or opinions resolving the case. On

March 29, 2011 we issued our judgment affirming the district

court’s judgment in No. 10-5257, reversing its judgment in No. 10-

5269, vacating the injunction we had issued on September 22, 2010,

and noting that that we did so for reasons to be explained “in

opinions to be filed at a later date.” Greater New Orleans Fair

Housing Action Center v. U. S. Dep’t of Housing & Urban

Development, No. 10-5257 (D.C. Cir. March 29, 2011). These are

those opinions.

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Situation and Pipeline Report Week 247, 1 (March 29, 2011)

(“Weekly Situation and Pipeline Report”),

http://www.road2la.org/Docs/pipeline/week247pipeline.pdf.

The program is supported by three special appropriations of

Community Development Block Grants by Congress in 2005,

2006, and 2007. 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) (“2007 Act”).

The program’s grants fall into three categories. Option 1

grants are available to those Louisiana homeowners who plan

to repair or rebuild their damaged homes. Homeowners

receiving Option 1 grants must agree to a covenant requiring

their rebuilt home to be owner-occupied for at least three

years (the covenant runs with the house so that any buyer of

the house is bound if the grant recipient sells the house).

Options 2 and 3 relate to homeowners without plans to rebuild

on their original homesites. This case concerns only grants

made under Option 1.

OCD has calculated these grants by taking the lesser of

the pre-Katrina value of the home and the cost-to-rebuild,

subtracting the value of any FEMA or insurance proceeds

received by the homeowner, and, if the homeowner carried no

home insurance, applying a 30% penalty (i.e., 30% of the

lower of value or cost-to-rebuild, minus any FEMA grant).

D.A. 110. The resulting total is capped at $150,000. The

formula has special provision for houses more than half (but

not fully) destroyed and for homeowners who must raise the

elevation of their homes in order to comply with new

regulations. Homeowners with incomes that are no higher

than 80% of the “area median income” may receive an

Additional Compensation Grant (“ACG”) to cover any

difference between the cost-to-rebuild and the amount of their

compensation and elevation grants. ACGs were initially

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subject to a $50,000 limit, but that was removed before the

district court heard plaintiffs’ motion for a preliminary

injunction. The $150,000 cap applies to any recipient’s total

grant, including any elevation grant or ACG. The various

formulae used in awarding grants have been developed by the

LRA and OCD and approved by HUD.

Plaintiffs brought suit against HUD and Keegan on behalf

of all African-American homeowners in New Orleans who

will have participated in the Road Home program by the first

day of trial and had their grant amounts calculated on the basis

of pre-storm value of their homes. The parties agreed to defer

briefing on class certification until after commencement of

discovery, D.A. 38-39, and there has been no ruling on class

certification. Plaintiffs alleged that the Option 1 formula

violates the Fair Housing Act, 42 U.S.C. §§ 3604(a), 3605(a),

3608(d), (e)(5), and the Housing and Community

Development Act of 1974, 42 U.S.C. § 5304(b)(2). Their

theory is that the formula’s use of pre-Katrina house values as

a grant ceiling had a disparate impact on African-American

homeowners, who tend to live in New Orleans neighborhoods

with lower property values than those in predominately white

neighborhoods.

Factually, the disparate impact claim relies primarily on a

2008 study by PolicyLink, using data on the Road Home

program provided by the LRA and the Louisiana Housing

Finance Agency. Plaintiffs focus on a “resource gap” found

by the study, which it defined as the difference between total

resources available for rebuilding and the cost of rebuilding.

PolicyLink calculated resources for rebuilding as including all

grants under the Road Home program, plus money received

from FEMA and the homeowner’s insurance proceeds.

PolicyLink, A Long Way Home: the State of Housing

Recovery in Louisiana 2008 (“PolicyLink”), at 39,

http://policylink.info/threeyearslater/. For rebuilding costs, it

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used the same formulae that LRA used in calculating grant

awards.

The study found that although African-American Option

1 grant recipients received larger average Road Home grants

than white recipients, the “resource gap” was $39,082 on

average for African-American grant recipients, compared with

$30,863 on average for white grant recipients. PolicyLink at

42. The study suggested that much of the “resource gap” was

driven by the element of the formula using home values as a

ceiling on grants. Among homeowners who were paid under

the prong of the formula looking to pre-Katrina home values,

the average resource gap was nearly $50,000, compared to

about $14,000 for homeowners who were paid under the

formula’s cost-to-rebuild prong. PolicyLink at 43. The study

also noted that “African American households and low-

income households had lower pre-storm home values than the

average for closed[2] applicants rebuilding in place” and that

“[l]ow-income households and African Americans had less

insurance on average than any other demographic group.”

PolicyLink at 38. Plaintiffs presented data from the

PolicyLink study and the 2000 census showing that houses in

predominantly African-American neighborhoods in New

Orleans have significantly lower values than houses in white

neighborhoods. PolicyLink at 46-51; D.A. 163, 165.

In October 2009 the state of Louisiana (with the consent

of HUD) removed the $50,000 ceiling on ACGs for low

income homeowners. D.A. 236. As a result homeowners

whose income was no higher than 80% of the median became

eligible for total grants up to the lesser of the full cost-to-

rebuild or $150,000. Because the new formula made low

2

PolicyLink appears to use the term “closed” for those who

had received their Road Home grants.

7

income homeowners eligible for grants up to the cost-to-

rebuild, or $150,000, regardless of the pre-Katrina value of

their homes, it effectively removed, for low income

homeowners, the part of the grant formula that considered

homes’ pre-Katrina value. In effect, low income homeowners

received the relief requested by plaintiffs. As of May 6, 2010,

OCD had paid 9,301 grant recipients $326.5 million in

additional ACGs. D.A. 193.

In June 2010 plaintiffs requested a temporary restraining

order (“TRO”) and preliminary injunction that would enjoin

Keegan “from taking any action to obligate, reallocate and/or

spend any funds that, as of June 2, 2010, remain available to

the LRA’s Road Home Homeowner Assistance program, and

. . . from taking any action to submit any request to the U.S.

Department of Housing and Urban Development . . . that

would result in or cause further obligation, award, and/or

disbursement of funds . . . .” D.A. 68. The purpose of this

preliminary injunction would have been to preserve a source

of funds for the additional grants that plaintiffs (and the class

of homeowners they purport to represent) would be entitled to

if their lawsuit were to succeed. The proposed injunction

would thwart LRA’s plans to use at least $100 million of

available funds on a construction lending program to support

loans to Road Home grant recipients who for various reasons

had insufficient funds to rebuild and difficulty obtaining

credit. D.A. 230-31.

The district court denied plaintiffs’ motion. Although it

found that the plaintiffs were likely to be able to make a prima

facie showing of disparate impact, it concluded that state

sovereign immunity under the Eleventh Amendment, as

interpreted by Edelman v. Jordan, 415 U.S. 651 (1974),

barred the relief. While Edelman finds “prospective” relief

permissible under the Eleventh Amendment, it bars

“retroactive” injunctive relief as an impingement on state

8

sovereign immunity. See Edelman, 415 U.S. at 677.

Although the injunction sought would only hold payments in

abeyance, plaintiffs sought it in aid of their claim to have

grant awards recalculated for Option 1 applicants who had

already been paid, and the district court ruled that a mandate

of such payments would “effectively constitute an award of

damages” for a past breach of a legal duty. Greater New

Orleans Fair Housing Action Center v. U. S. Dep’t of Housing

& Urban Development, 723 F. Supp. 2d 1, 9 (D.D.C. 2010).

Plaintiffs appealed the denial of this first preliminary

injunction motion, arguing that the district court erred in its

analysis of the implications of Edelman. They also filed a

motion in the district court for a second TRO and preliminary

injunction. This alternative relief was to bar OCD from using

the house value element of the existing grant formula in any

future grants, relief that did not, under the district court’s prior

ruling, run afoul of Edelman’s bar on retrospective relief.

Little was at stake, however. In her opposition to this second

motion, defendant Keegan pointed out that as of July 29, 2010

there were only 141 African-American Option 1 grant

applicants in Orleans Parish who were not eligible for an

ACG and had not yet received any grants. Furthermore, of

these 141 applications several did not meet program eligibility

requirements, 54 had not replied to correspondence from OCD

to indicate their continuing interest in the program for a

substantial period of time, and over 80 had various

deficiencies in their documentation. D.A. 356. Because the

deadline for submitting initial Option 1 grant applications has

already passed, there will not be any new applicants. 2007

Act, 121 Stat. at 1343, § 159(a).

The district court granted this second motion; because the

second requested injunction would affect only the awards of

future grantees, the relief sought would be permissible under

Edelman and Ex Parte Young, 209 U.S. 123 (1908). Greater

9

New Orleans Fair Housing Action Center v. U. S. Dep’t of

Housing & Urban Development, 723 F. Supp. 2d 11, 13

(D.D.C. 2010). As before, it found that plaintiffs had shown a

likelihood of success on the merits of their disparate impact

claim, and in addition found the other elements of the

conventional preliminary injunction formula tilting in

plaintiffs’ favor. Id. at 13-14.

Defendant Keegan filed a cross-appeal of the district

court’s ruling on the second motion for a TRO and

preliminary injunction. She argues, among other things, that

plaintiffs do not have standing and that the district court did

not have jurisdiction to enter this preliminary injunction

because jurisdiction over the matter had shifted to the court of

appeals.

While the appeal and cross-appeal were pending before

us, plaintiffs filed a motion for an injunction pending appeal.

We granted that motion and enjoined Keegan “from

committing Road Home funds to any new projects, such as the

proposed construction lending program, pending disposition

of this appeal.” Greater New Orleans Fair Housing Action

Center v. U. S. Dep’t of Housing & Urban Development, No.

10-5257 (D.C. Cir. Sept. 22, 2010) (order granting injunction

pending appeal). This ruling, in effect, gave plaintiffs

temporarily the relief they sought in the first motion for a

preliminary injunction.

* * *

In ruling on a preliminary injunction a key issue—often

the dispositive one—is whether the movant has shown a

substantial likelihood of success on the merits. See Munaf v.

Geren, 553 U.S. 674, 690 (2008). As we’ve seen, the district

court resolved that issue against plaintiffs on the ground that

10

the relief sought would violate Louisiana’s sovereign

immunity. It ruled that requiring Louisiana to adjust the

award of grant recipients who had already been paid under the

Road Home program would be retrospective relief of the type

barred by Edelman. The issue is in fact extremely complex,

for several reasons: (1) Although the Road Home program is

administered by a state agency, it is funded by the federal

government; (2) Although Congress initially allowed the state

agency a fairly wide discretion to deploy the funds—subject

to HUD approval—in response to the Katrina and Rita

disasters, the 2007 Act explicitly required them to be used

“solely for the purpose of covering costs associated with

otherwise uncompensated but eligible claims that were filed

on or before July 31, 2007, under the Road Home program.”

2007 Act, 121 Stat. at 1343, § 159(a); (3) The OCD and

defendant Keegan have changed the Road Home formula over

time, giving additional sums to prior recipients (leading

plaintiffs to divide the grants into categories they call “initial”

and “final”). And there is no precedent in our circuit applying

Edelman to comparable facts. Other circuits have adopted

greatly varying interpretations of Edelman where a state’s

discretion over the funds at issue is limited. Compare

Vaqueria Tres Monjitas Inc. v. Irizarry, 587 F.3d 464, 478-80

(1st Cir. 2009) (holding that Edelman does not bar retroactive

relief paid from special state trust fund), reh’g denied

Vaqueria Tres Monjitas Inc. v. Irizarry, 600 F.3d 1 (1st Cir.

2010); Bennett v. White, 865 F.2d 1395, 1408 (3rd Cir. 1989)

(permitting retrospective relief under Edelman to the extent

that any funds paid by the state will be reimbursed by the

United States), and Brown v. Porcher, 660 F.2d 1001, 1006-

07 (4th Cir. 1981) (holding that Edelman does not bar

retrospective relief when the award is not paid from a state’s

general revenue fund), with Paschal v. Jackson, 936 F.2d 940,

944 (7th Cir. 1991) (declining to inquire as to the source of

state funds), and Esparza v. Valdez, 862 F.2d 788, 794 (10th

11

Cir. 1988) (rejecting a rule that would look to whether “relief

would be paid out of a general or special revenue fund”).

By contrast, we find the substantive merits relatively

easy. But we can reach them only if permitted to do so by

Steel Co. v. Citizens for a Better Environment, 523 U.S. 83

(1998), which generally gives an absolute priority to

jurisdictional questions. We conclude that Steel Co. presents

no obstacle. We can perceive no good reason that Louisiana’s

sovereign immunity might preclude all relief. Although

defendant Keegan makes several wholly implausible

arguments to the effect that the second motion for a

preliminary injunction is barred by the Eleventh Amendment,

these arguments rest on a fundamental confusion over the

significance of Ex Parte Young, and they read Idaho v. Coeur

d’Alene Tribe of Idaho, 521 U.S. 261 (1997), as if it

effectively overruled Ex Parte Young. At a minimum, it is

clear that under Edelman the district court has jurisdiction to

order LRA to use a different formula for future grantees.

Thus, unlike the typical jurisdictional issue, the Edelman issue

is not one that calls into question the authority of the court to

hear plaintiffs’ claim on the merits. So it is clear that

regardless of how the Eleventh Amendment might apply to

the first preliminary injunction, the district court properly

exercised jurisdiction over both the case as a whole and

plaintiffs’ motion for a preliminary injunction, and that we

may do the same.

We note for the record that, apart from situations like this

where the only jurisdictional obstacle is to particular varieties

of relief, there is considerable uncertainty about sequencing in

the Eleventh Amendment context. The Supreme Court has

found it permissible, “indeed appropriate,” to decide the issue

of whether a statute provides for suits against the states before

determining whether, if it did, the Eleventh Amendment

would permit such a suit. Vermont Agency of Natural

12

Resources v. United States ex rel. Stevens, 529 U.S. 765, 780

(2000). It reasoned that the statutory issue was “logically

antecedent to the existence of the Eleventh Amendment

question,” id. (internal quotations omitted), and that the court,

in resolving that issue would not “pronounce upon any issue,

or upon the rights of any person, beyond the issues and

persons that would be reached under the Eleventh

Amendment inquiry anyway” (as it might in resolving

questions such as whether the statute permitted private causes

of action generally). Id. Thus the “combination of logical

priority and virtual coincidence of scope makes it possible,

and indeed appropriate, to decide the statutory issue first.” Id.

at 779-80. See also United States ex rel. Long v. SCS

Business & Technical Institute, Inc. 173 F.3d 890, 893-98

(D.C. Cir. 1999). But at least one circuit is ready to consider

merits before passing on an Eleventh Amendment issue on the

grounds that state sovereign immunity, unlike ordinary subject

matter jurisdiction issues such as standing, may be waived by

the state and, if not raised by the state, may but need not be

considered by the court sua sponte. Parella v. R.I.

Employees’ Retirement System, 173 F.3d 46, 53-57 (1st Cir.

1999); see also Greenless v. Almond, 277 F.3d 601, 607-08

(1st Cir. 2002); cf. United States ex rel. Long, 173 F.3d at

893-94 (noting several Supreme Court hints that the Eleventh

Amendment was no more than “quasi-jurisdictional”). But

see Vermont Agency, 529 U.S. at 779 (noting that personal

jurisdiction “is an essential element of the jurisdiction of a

district court, without which the court is powerless to proceed

to an adjudication”). But because here the Eleventh

Amendment is at most a barrier to some possible remedies

and the district court’s jurisdiction over the case as a whole is

clear, we can consider the merits first, without sorting out the

sequencing issue for other contexts.

13

* * *

In evaluating likelihood of success on the substantive

merits, we review the district court’s legal conclusions de

novo. Davis v. PBGC, 571 F.3d 1288, 1291 (D.C. Cir. 2009).

Contrary to the district court, we conclude that plaintiffs’

disparate impact claim lacks merit.

Section 3604(a) of the Fair Housing Act makes it

unlawful “To refuse to sell or rent after the making of a bona

fide offer, or to refuse to negotiate for the sale or rental of, or

otherwise make unavailable or deny, a dwelling to any person

because of race, color, religion, sex, familial status, or

national origin.” 42 U.S.C. § 3604(a). We have not decided

whether this permits disparate impact claims. 2922 Sherman

Avenue Tenants’ Association v. District of Columbia, 444

F.3d 673, 679 (D.C. Cir. 2006). The argument that it does

rests largely on the point that the language is parallel to that of

Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-

2, under which a plaintiff can prevail by showing either

disparate impact or disparate treatment. See 2922 Sherman

Avenue Tenants’ Association, 444 F.3d at 679. Each of the

eleven circuits that have resolved the matter has found the

disparate impact theory applicable under the Fair Housing

Act. Id. As the matter has not been briefed and its resolution

is unnecessary to the outcome, however, we shall, as in 2922

Sherman Avenue Tenants’ Association, simply assume the

availability of the disparate impact theory. We note, however,

that no court has applied disparate impact theory to the

formulae used administering a grant program.

Similarly, we need not decide as between the two leading

tests for applying disparate impact, the four-factor balancing

test of the Seventh Circuit, Metropolitan Housing

Development Corp. v. Village of Arlington Heights, 558 F.2d

1283, 1290 (7th Cir. 1977), or the burden-shifting test of the

14

Second Circuit, Huntington Branch, NAACP v. Town of

Huntington, 844 F.2d 926, 935-36 (2nd Cir. 1988), aff’d on

other grounds, 488 U.S. 15, 18 (1988). As in 2922 Sherman

Avenue Tenants’ Association, the success of plaintiffs’ claim

doesn’t turn on the details of the legal test; either approach

requires proof of disproportionate impact, measured in some

plausible way, 444 F.3d at 679-80, and plaintiffs have not

offered such proof.

When presenting a disparate impact claim, a plaintiff

must generally “demonstrate with statistical evidence that the

practice or policy has an adverse effect on the protected

group.” Garcia v. Johanns, 444 F.3d 625, 633 (D.C. Cir.

2006) (evaluating a disparate impact claim under the Equal

Credit Opportunity Act); see also Watson v. Fort Worth Bank

& Trust, 487 U.S. 977, 987 (1988). “The correct inquiry is

whether the policy in question had a disproportionate impact

on the minorities in the total group to which the policy was

applied.” Betsey v Turtle Creek Associates, 736 F.2d 983, 987

(4th Cir. 1984); see also Darensburg v. Metropolitan

Transportation Commission, No. 09-15878, --- F.3d ---, 2011

WL 540592 (9th Cir. 2011) (evaluating a disparate impact

claim alleging discriminatory allocation of mass transit

funds). In this case, the policy—the grant formula that called

for using the lesser of pre-Katrina home value and cost to

repair—was applied to all applicants for Option 1 Road Home

grants. The question, then, is whether the formula as a whole

had a disparate impact on African-American grant applicants.

We pause to consider examples of what is precluded by a

focus on the effects of the formula as a whole. In any state

where African-American and white homeowners have

significantly different economic profiles, it will presumably

be the case that particular elements of a complex formula such

as that of the Road Home program will have a

disproportionate negative impact on African-Americans, an

15

impact potentially offset by other elements of the formula.

For example, assuming that use of the pre-Katrina value of

home as one element of the formula favors white homeowners

on average, the PolicyLink study invoked by plaintiffs tells us

that African-American homeowners received less money from

insurance on average, PolicyLink at 38, so that the formula’s

deduction of insurance proceeds from the grant appears to

favor African-Americans. Similarly, the $150,000 cap on

total grants would seem to disfavor wealthier (and therefore,

according to the PolicyLink study, disproportionately white)

grant recipients. It seems unlikely that an agency could

fashion a grant formula in this context without some element

having a disproportionate impact on a protected group. (For

the moment we defer consideration of the consequences if, as

under Title VII, whites are also acceptable plaintiffs.)

For the same reason, attention to the formula’s effects as

a whole bars our looking at the effects of the grant formula

only in Orleans Parish. If the economic profiles of racial

groups differ from parish to parish in the parts of Louisiana

affected by hurricanes Katrina and Rita, then a grant formula

that has non-disparate racial effects for Louisiana as a whole

can easily have a disparate impact on African-American

residents in at least some individual parishes (not to mention

smaller geographic units). To allow plaintiffs to pick a special

subset of the affected localities to test for disparate impact

would, just like allowing them to single out of the effects of a

single formula element, expose almost any grant formula to

litigation. Although plaintiffs focus much of their case on

Orleans Parish, we must consider the impact on Louisiana as a

whole.

Apart from these obvious limits, it is hard to see just how

one may affirmatively identify a sound benchmark for

assessing the disparateness of a grant formula’s impact (or, to

put the problem slightly differently, to say what a non-

16

disparate impact would look like). Plaintiffs urge us to focus

on the “resource gap” facing Option 1 grant recipients, that is,

the difference between the cost-to-rebuild and the “total

resources” of an applicant—the latter being defined (by them

and the PolicyLink study) as the grantees’ total receipts from

insurance, FEMA and the Road Home program. They point

to the PolicyLink finding of a “resource gap” between

African-American and white grant recipients of slightly over

$8,000 ($39,082 on average for African-American grant

recipients, compared with an average of $30,863 for white

grant recipients). PolicyLink at 42.

Even if we accepted “resource gap” as the appropriate

measure, which we do not, plaintiffs’ evidence is problematic

at best. The PolicyLink study predates the removal of the

$50,000 cap on ACGs (which in turn predated the district

court injunction proceeding), creating what OCD calls the

Additional ACG program. That removal has had considerable

impact. By May 6, 2010 (before the district court ruled on the

first motion for a TRO and preliminary injunction), OCD had

paid 9,301 grant recipients $326.5 million in Additional

ACGs. D.A. 193. According to the most recent data, OCD

has now disbursed $466,313,036.52 to 13,267 grant

recipients. Weekly Situation and Pipeline Report at 5. This is

more than 10% of Option 1 grants to low income recipients

and represents an average Additional ACG of over $35,000.

Id. We do not know the fraction of these grants received by

African-Americans. But if African-American grant recipients

are more likely to qualify as low income and are more likely

to face a resource gap, as the PolicyLink study suggests, they

would be eligible substantially more often, and for

substantially larger average Additional ACGs, than would

white recipients. Thus removal of the ceiling on ACGs casts

grave doubt on plaintiffs’ claim even under their “resource

gap” theory.

17

At oral argument, plaintiffs’ counsel responded to the

removal of the $50,000 cap by arguing that it would have no

effect among recipients altogether ineligible for ACGs, i.e.,

those with incomes higher than 80% of “area median

income.” But this sort of analytical cherry-picking seems to

us no more valid than the same practice that we rejected as

applied to individual elements of the formula or to geographic

units.

In any event, we find the “resource gap” an inappropriate

benchmark. The “resource gap” measures neither the

resources a recipient receives under the Road Home program,

nor a grant recipient’s ability to obtain housing, nor the extent

to which the Road Home program compensates a recipient for

hurricane-inflicted losses. It measures only the extent to

which grant receipts, FEMA receipts and insurance receipts

fall short of the cost-to-rebuild a house of the size that the

grant recipient owned before the hurricanes. This is a

completely artificial metric. It represents an unprincipled

mish-mash of considerations in tension with one another. The

“resource gap” metric gestures at measuring need by

calculating shortfalls from the cost of rebuilding rather than

size of the total grant. But the cost-to-rebuild element rests on

the size of applicant’s former house, rather than assuming (as

would an egalitarian concern for need) an equal cost of

housing for all. And the treatment of insurance seems

completely anomalous. It makes homeowners who bothered

to insure their homes appear to be the recipients of some sort

of government munificence, while in fact their grants have

been reduced on account of their precautions (a reduction

presumably made because OCD’s resources were finite and

because the justifications for the “collateral source” rule are

absent here).

An alternative focus would be the total value of Road

Home grants received, or the value of Road Home grants as a

18

proportion of a grantee’s uncompensated losses. But on this

criterion, the plaintiffs’ own evidence is fatal to their claim. It

indicates that African-American grant recipients on average

have received larger total awards than did white grant

recipients. PolicyLink at 38 (“African American and elderly

households received higher average grants because a higher

percentage of them received additional compensation grants,

which were available to low-income individuals.”). If

anything, this discrepancy has become greater since the

PolicyLink study, by virtue of removal of the $50,000 cap on

ACGs.

In short, then, plaintiffs’ facts are at best sketchy even on

the implausible resource-gap theory, and do not begin to show

a violation on the size-of-grant metric.

Alternative benchmarks are clearly conceivable. In

rejecting the resource-gap theory and in tentatively applying

the size-of-grant theory, we do not mean to endorse size-of-

grant as necessarily suitable. Choice of a benchmark is

further complicated by uncertainty whether one need consider

only the impact on minority groups. As Title VII permits

white employees to bring job discrimination claims,

McDonald v. Santa Fe Trail Transportation Co., 427 U.S.

273, 279-80 (1976), white grant recipients might, on the size-

of-grant standard, be able to make a prima facie case of

disparate impact. See also Jordan v. Khan, 969 F. Supp. 29,

30-31 (N.D. Ill. 1997) (permitting white plaintiff to bring

racial discrimination claim under the Fair Housing Act);

Miller v. Towne Oaks East Apartments, 797 F. Supp. 557, 561

(E.D. Tex. 1992) (same). In the face of this legal uncertainty,

adoption of the size-of-grant benchmark would put OCD—

and other agencies trying to develop formulae for comparable

grants—in a damned-if-you-do, damned-if-you-don’t

quandary.

19

Thus the data offered by plaintiffs to show a disparate

impact fall short. The numbers by no means establish that the

OCD formula actually in effect at the time of the district court

proceeding created results amounting to a violation even

under plaintiffs’ resource-gap theory, which in any event we

reject. On the less implausible size-of-grant standard, the

evidence flatly contradicts their claim. As a result, plaintiffs

have not shown a likelihood of success on the merits. While

the criteria governing grant of a preliminary injunction

include other elements (the balance of harms to the parties and

the effect on the public interest), see, e.g., Davis v. PBGC,

571 F.3d at 1291, and we review the district court’s balance of

factors for abuse of discretion, id., there is no need to remand

to the district court. When a plaintiff has not shown a

likelihood of success on the merits, there is no need to

consider the remaining factors. See Arkansas Dairy

Cooperative Ass’n, Inc. v. U.S. Dep’t of Agriculture, 573 F.3d

815, 832 (D.C. Cir. 2009); Apotex, Inc. v. FDA, 449 F.3d

1249, 1253 (D.C. Cir. 2006).

We therefore affirm the district court’s denial of the

initially requested injunction.

* * *

We turn now to plaintiffs’ second motion for a TRO and

preliminary injunction. The district court granted this motion

several weeks after plaintiffs’ notice of appeal of its first

injunction ruling. Defendants appeal this decision on several

grounds, including jurisdictional ones—that plaintiffs lack

standing and that their appeal of the denial of the first motion

for a TRO and preliminary injunction divested the district

court of jurisdiction over the matter. Under Steel Co. we

would normally be required to address these jurisdictional

questions before ruling on the substantive merits, but this case

20

fits well within an exception recognized by Steel Co. If the

outcome on the merits is “foreordained” by another ruling,

such that “the pretermission of the jurisdictional question [is

not used] as a device for reaching a question of law that

otherwise would have gone unaddressed,” then a court may

turn to the merits without considering the jurisdictional issue.

Steel Co., 523 U.S. at 98. In ruling on the first motion for a

preliminary injunction, we found that plaintiffs’ likelihood of

success on the merits of their underlying claim was slim.

Although the scope of relief requested differs, the second

motion implicates the exact same disparate impact claim and

thus shares the first motion’s fatal defect. And, as noted

above, when a plaintiff has not shown a likelihood of success

on the merits, we need not consider the other factors. Our

ruling on the first motion is therefore fully dispositive of the

second motion. Accordingly, we reverse the district court’s

grant of the second motion.

* * *

As set forth in our March 29, 2011 judgment, we affirm

the district court’s denial of plaintiffs’ first motion for a TRO

and preliminary injunction and reverse the district court’s

grant of plaintiffs’ second motion. We also, as previously

ordered, vacate the injunction we had issued pending appeal.

Finally, we remand the case for proceedings not inconsistent

with this opinion.

Rogers, Circuit Judge, concurring in part and concurring

in the judgment: Although I concur in holding that plaintiffs

fail to demonstrate entitlement to injunctive relief based on a

likelihood of success on the merits of their disparate impact

claim, I write separately to identify the narrow issue this court

is required to decide in disposing of these appeals.

Plaintiffs’ theory of the case is straightforward: The

formula used to determine grant awards of federal funds under

Option 1 of the Road Home Program1, which bases the award

on the lesser of the pre-storm value of an applicant’s home and

the cost to rebuild, has a discriminatory impact on African-

American grantees living in historically segregated

communities because generally African-Americans own homes

with pre-storm values that fall below the cost to rebuild, while

whites living in predominantly white communities own

comparable homes with pre-storm values that exceed the cost to

rebuild. See Compl. ¶¶ 52-60. Robin Keegan, then-Executive

Director of the Office of Community Development for the State

of Louisiana, interposed three objections to plaintiffs’ claim of

likelihood of success on the merits: (1) The Eleventh

Amendment bars any relief; (2) The Fair Housing Act, 42

U.S.C. §§ 3601 et seq., does not afford a cognizable claim; and

(3) Plaintiffs’ evidentiary proffer does not account for the total

federal funds distributed and hence fails to show that the pre-

storm value calculation under Option 1 of the Road Home

Program had a disparate impact on the proposed class of

1

Maj. Op. at 3-4, referring to the funding of the Road Home

Program by congressional appropriations of Communiity

Development Block Grants in 2005, 2006, and 2007. See generally

Title I of the Housing and Community Development Act of 1974, Pub.

L. No. 93-383, 88 Stat. 663 (codified as amended at 42 U.S.C. §§

5301 et seq.).

2

African-American homeowners in Orleans Parish.2

1. The Eleventh Amendment argument is based on

fundamental factual and legal misunderstandings, see Maj. Op.

at 10-11, and is effectively conceded by Keegan. Plaintiffs

contend that because Keegan must use the remaining $148

million of federal funds to supplement the federal grants of

existing Road Home recipients, see An Act Making

appropriations for the Department of Defense for the fiscal year

ending September 30, 2008, and for other purposes, Pub. L. No.

110-116, § 159, 121 Stat. 1295, 1343-44 (2007) (“2007 Act”),

any relief would remedy an ongoing violation of federal law and

have no impact on the state’s treasury or budget, thereby

avoiding the Eleventh Amendment’s sovereign immunity bar.

See Edelman v. Jordan, 415 U.S. 651 (1974); Ex parte Young,

209 U.S. 123 (1908). In response Keegan claimed that the Ex

parte Young exception to the bar interposed by the Eleventh

Amendment was inapplicable because the state, not Keegan, is

the real party in interest inasmuch as the state’s political or

property rights and its public treasury would be adversely

affected were plaintiffs to prevail. This argument is premised

on Keegan’s position that the recalculation of Option 1 grants

sought by plaintiffs would “amount to money damages to be

2

Keegan also maintained as to the second motion for a

preliminary injunction that plaintiffs lacked standing and that the

district court lacked jurisdiction. See Maj. Op. at 9. Keegan

acknowledges that three of the five named plaintiffs are homeowners

in New Orleans whose grant amounts under the Road Home Program

were calculated based on the pre-storm value of their homes and that

they are ineligible to receive Additional Compensation Grants. See

Compl. ¶¶ 13-17, 21; Def.-Appellee Cross-Appellant Robin Keegan

Br. at 29. Class certification, by agreement of the parties, has been

postponed by the district court. The court does not reach the grounds

on which Keegan argues that the district court lacked jurisdiction. See

Maj. Op. at 19-20.

3

paid from the State treasury,” Def.-Appellee Cross-Appellant

Robin Keegan Br. at 15, and that “[t]he allocation of state funds

by the State of Louisiana to compensate homeowners after

Hurricanes Katrina and Rita is an important sovereign state

interest,” id. at 25. Even after plaintiffs pointed to the federal

source of the funds, Keegan repeated in reply that “the funds in

question are state rather than federal funds.” Def.-Appellee

Cross-Appellant Robin Keegan Reply Br. at 23. This insistence

continued during oral argument, where Keegan argued that

“plaintiffs’ requested relief is a retrospective claim for damages

to be paid from the state treasury.” Oral Arg. at 24:45-52.

Keegan has not identified any state funds that are

disbursed under the Road Home Program, and Congress, in

appropriating the disaster recovery Community Development

Block Grant funds from which the $148 million would be

drawn, mandated that “such funds serve only to supplement and

not supplant any other State or Federal resources committed to

the Road Home program.” 2007 Act § 159(b), 121 Stat. at

1343. As plaintiffs’ counsel confirmed to the district court and

during oral argument, the $148 million remains in “the custody

and control of the United States” and the funds “have never

been disbursed to Louisiana; Louisiana has no right to use them

at this point.” Oral Arg. at 34:46-35:14; Clarification of the

[District] Court’s May 24, 2010 Order, No. 1:08-cv-1938, at 6

(D.D.C. June 6, 2010).3 Moreover, counsel for Keegan and for

plaintiffs confirmed during oral argument that any unused Road

3

See also 2007 Act § 159(b), 121 Stat. at 1343 (“No funds

shall be drawn from the [United States] Treasury under this section

beyond those necessary to fulfill the exclusive purpose of this

section,” namely “to enable the Secretary. . . to make a grant or grants

to the State of Louisiana solely for the purpose of covering costs

associated with otherwise uncompensated but eligible claims that were

filed on or before July 31, 2007, under the Road Home program”).

4

Home Program funds would revert to the United States

Treasury. See Oral Arg. at 7:45-9:00, 27:52-28:35.

As legal support for the Eleventh Amendment objection,

Keegan relied on the dissenting opinion in Seminole Tribe of

Florida v. Florida, 517 U.S. 44, 78 (1996) (Stevens, J.,

dissenting), and Idaho v. Coeur d’Alene Tribe of Idaho, 521

U.S. 261 (1997). As the majority notes, Keegan

“implausibl[y]” reads Coeur d’Alene to overturn Ex parte

Young. Maj. Op. at 11. Other than seeking an extension of the

“special sovereign interest” exception addressed in Coeur

d’Alene, Keegan cited no authority to support an Eleventh

Amendment bar to plaintiffs’ claims where only federal funds

are involved and plaintiffs’ proposed form of relief will not

impose a monetary loss on the state treasury. Because the

federal funds at issue remained in the United States Treasury,

Keegan failed to explain how they could be considered state

funds in any legal sense.4 The Supreme Court’s decision in

Edelman, 415 U.S. at 664-67 & n.11, and its progeny, see, e.g.,

Papasan v. Allain, 478 U.S. 265, 278-81 (1986), emphasize that

the Eleventh Amendment prohibits retroactive relief that

imposes a “monetary loss” on the state’s treasury. By failing

to oppose plaintiffs’ argument regarding the non-effect on the

state treasury, Keegan has effectively conceded the point

because “[t]he party asserting Eleventh Amendment immunity

bears the burden of proving its applicability.” Betts v. New

Castle Youth Dev. Ctr., 621 F.3d 249, 254 (3d Cir. 2010)

(citation and internal quotation marks omitted).

4

On September 22, 2010, this court granted plaintiffs’ motion

for a temporary injunction. Upon being advised by letter of March 28,

2011 from counsel for plaintiffs and Keegan that serious settlement

negotiations were underway, see D.C. Cir. Handbook Section II.C.2,

the court vacated the injunction on March 29, 2011.

5

2. The objection that plaintiffs have no cognizable

claim under the Fair Housing Act, because, according to

Keegan, the Road Home Program is a compensation grant

program rather than a housing program, was a passing assertion

in Keegan’s brief without legal citation. A passing reference to

an unsupported narrative is insufficient to present an argument

to this court. Cf., e.g., Bush v. District of Columbia, 595 F.3d

384, 388 (D.C. Cir. 2010) (citing FED. R. APP. P. 28(a)(9)(A)).

Even assuming for purposes of argument that Keegan

incorporated authority by referencing her memorandum

opposing plaintiffs’ motion for injunctive relief, the argument

was confined to a footnote and a single citation involving a

city’s failure to prevent dumping at a neighboring site. See

Opp’n to Pls.’ Mot. for a TRO and Prelim. Inj., No. 1:08-cv-

1938, Doc. No. 57, at 16 n.5 (June 14, 2010) (citing Cox v. City

of Dallas, 430 F.3d 734, 740 (5th Cir. 2005), cert. denied, 547

U.S. 1130 (2006)). This court ordinarily does not address an

argument presented in a footnote. See, e.g., Am. Wildlands v.

Kempthorne, 530 F.3d 991, 1001 (D.C. Cir. 2008). In any

event, the cases cited by the Fifth Circuit in Cox are likewise

not on point. See Cox, 430 F.3d at 740 (citing Southend

Neighborhood Improvement Ass’n v. County of St. Clair, 743

F.2d 1207, 1210 (7th Cir. 1984)). Plaintiffs’ contention is

different, namely that if the remaining federal funds for the

Road Home Program are not available to support the ultimate

remedy in their action, then thousands of plaintiffs will forever

lose the opportunity to obtain grants for home repairs on a non-

discriminatory basis.

3. The evidentiary objection is persuasive because a

factual premise underlying plaintiffs’ request for injunctive

relief has been overtaken by events. In the district court,

Keegan twice declined to dispute plaintiffs’ evidentiary proffer

with “data about the administration of the [Road Home]

Program that would show what effect the Option 1 formula has

6

had,” despite the district court’s finding of a prima facie case

of disproportionate impact. See Greater New Orleans Fair

Hous. Action Ctr. v. U.S. Dep’t of Hous. & Urban Dev., 723 F.

Supp. 2d, 1, 6 (D.D.C. 2010). The district court noted,

moreover, that Keegan has not “demonstrate[d] that plaintiffs’

statistics or logic is flawed.” Id. Nonetheless, in moving for a

preliminary injunction plaintiffs have the burden to demonstrate

the likelihood of success on the merits of their disparate impact

claim. See Gordon v. Holder, 632 F.3d 722, 724 (D.C. Cir.

2011) (citing Winter v. Natural Res. Def. Council, 129 S. Ct.

365, 374 (2008)); Wash. Metro. Area Transit Comm’n v.

Holiday Tours, Inc., 559 F.2d 841, 844 (D.C. Cir. 1977).

Keegan asserts on appeal that “the Road Home Program

is a state-wide program” and thus “when [plaintiffs] do submit

appropriate evidence, it will need to be on a state-wide level.”

Def.-Appellee Cross-Appellant Robin Keegan Br. at 33. The

majority credits this argument. Maj. Op. at 14. Keegan made

the argument only cursorily and without citation to authority,

and hence it is not properly presented for this court to resolve.

See, e.g., Bush, 595 F.3d at 388 (citing FED. R. APP. P.

28(a)(9)(A)).

Keegan does, however, present a persuasive argument

with respect to the 2008 PolicyLink study5 proffered by

plaintiffs. As Keegan points out, the PolicyLink study does not

consider the total current compensation package available to

Option 1 applicants. Although the study notes the availability

of Additional Compensation Grants (“ACGs”) to low- and

5

PolicyLink, A Long Way Home: The State of Housing

Recovery in Louisiana 2008 (“PolicyLink”),

http://policylink.info/threeyearslater/; see also affidavit of June 18,

2010, by the authors explaining the methodology.

7

moderate-income (“LMI”)6 applicants, at the time of the study

ACGs were subject to a $50,000 cap. See PolicyLink at 41.

Once this limitation was removed, effective January 2010, LMI

applicants could receive an ACG in an amount subject only to

the existing $150,000 cap for total Road Home Program grants.

Keegan asserts on brief that “[s]ince minority and disabled

families are more likely to be in the LMI category, the ACG

grants adjust for any alleged disparity caused by the [pre-storm

value] formula.” Def.-Appellee Cross-Appellant Robin Keegan

Br. at 34. In other words, with regard to LMI applicants,

Keegan claims the removal of the ACG cap effectively

eliminated the average resource gap of nearly $50,000

identified by the PolicyLink study for all grant recipients whose

awards were based on pre-storm value, which was larger for

African-American applicants than their white counterparts. See

PolicyLink at 42-43; see also Maj. Op. at 5-7.

During oral argument counsel for plaintiffs

acknowledged that the removal of the $50,000 cap for ACGs

resulted in LMI applicants “receiv[ing] the full amount [of their

cost to rebuild] up to $150,000” under the Option 1 grant

formula, making them “[in]eligible for any additional financial

relief under the order that [plaintiffs] seek.” Oral Arg. at 39:04-

45. This leaves in plaintiffs’ proposed class only those African-

American applicants or grantees who do not qualify for ACGs

due to their income levels. See id. Plaintiffs claim there are

9,500 other homeowners in Orleans Parish who received initial

grants based on pre-storm value but did not receive ACGs like

LMI homeowners. See Pls.-Appellants’ Br. at 22. Keegan

responds that only 19 applicants potentially fit into plaintiffs’

proposed class of non-LMI African-American applicants in

Orleans Parish whose grants were calculated using pre-storm

6

To qualify as LMI in Orleans Parish an applicant can have

a maximum income of only $29,637.

8

value. See Def.-Appellee Cross-Appellant Robin Keegan Reply

Br. at 30; see also Maj. Op. at 8. Regardless of which number

is correct, neither the 2000 U.S. Census data proffered by

plaintiffs, showing African-Americans in New Orleans are

more likely than white homeowners in New Orleans to own

homes with lower values, nor the 2008 PolicyLink study, which

groups all African-American homeowners in Orleans Parish

together regardless of income level, allow for disparate impact

analysis as to non-LMI African-American homeowners in

Orleans Parish. Plaintiffs’ anecdotal evidence, including

congressional testimony, does not fill the gap. Without

disaggregated data, the showing regarding African-American

applicants who are ineligible for ACGs is “too weak to give

[plaintiffs] the likelihood of success required for a preliminary

injunction.” Maj. Op. at 3.

The court, as a result, need not address the other three

preliminary injunction factors. See Apotex, Inc. v. FDA, 449

F.3d 1249, 1253-54 (D.C. Cir. 2006); Maj. Op. at 19. It bears

noting, however, that the majority takes a strange turn in

disposing of these appeals. In reaching Keegan’s evidentiary

objection, the majority meanders into disparate impact theory

– without citation to authority, e.g., Maj. Op. at 14-15, 17 – and

into benchmark suppositions not briefed by the parties much

less argued in the district court, id. at 17-18, and set up only to

be rejected without record evidence on either side of the new

constructs while ignoring support for plaintiffs’ evidentiary

proffer, id. at 19. The majority’s statewide analysis

requirement, id. at 14-15, suffers from similar flaws and, as

noted, that argument by Keegan is not properly before the

court. Along the way, the majority even speculates that white

recipients might have disparate impact claims under a different,

size-of-grant benchmark. Id. at 18. One might well wonder

what purpose these meanderings have other than to posit

hurdles for future disparate impact claims. Whatever their

9

purpose, the comments by the majority are unnecessary to the

resolution of these appeals. Because these issues were not

argued by the parties in their briefs (Keegan’s passing

assertions bare of authority fail to conform to FED. R. APP. P.

28(a)(9)(A)), and the appeals are based on a pre-discovery

record inasmuch as Keegan refused to present statistical data on

the Road Home Program to challenge plaintiffs’ evidentiary

proffer in the district court, ruminations regarding disparate

impact analysis and alternative statistical benchmarks are

properly left for another day.