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
2
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.
4
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
5
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
6
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.