City of Austin v. Paxton
City of Austin v. Paxton
Opinion of the Court
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendants Attorney General Ken Paxton and Texas Workforce Commission (collectively, the State)'s Motion to Dismiss for Lack of Subject Matter Jurisdiction and Failure to State a Claim [# 21], the City of Austin (the City)'s Response [# 24] in opposition, and the State's Reply [# 27] in support. Having reviewed the documents, the governing law, the arguments of counsel, and the file as a whole, the Court now enters the following opinion and order.
Background
The question in this case is whether federal law preempts a state law-Texas Local Government Code § 250.007(c) -that allows landlords to decline to rent to tenants who seek to pay their rent using federal housing vouchers.
The Federal Housing Choice Voucher Program
Congress created the Housing Choice Voucher Program to "aid[ ] low-income families in obtaining a decent place to live" and to "promot[e] economically mixed housing." 42 U.S.C. § 1437f(a). The voucher program is funded by the United States Department of Housing and Urban Development *753(HUD) and administered by state and local public housing authorities in accord with regulations promulgated by HUD.
Once admitted to the voucher program, program participants are responsible for finding a landlord in the private rental market willing to rent to them.
The City Ordinance
In December 2014, the City adopted a housing ordinance (the Ordinance) prohibiting landlords from refusing to rent to tenants who wish to pay for their housing using federal vouchers. Am. Compl. [# 16] at 5. The City enacted the Ordinance because to prevent landlords from discriminating against potential tenants who sought to pay their rent using federal housing vouchers. Id. at 3-5. According to the City, such discrimination relegates voucher holders to lower opportunity areas of the City and disproportionately impacts minority residents, children, and the disabled. Id. at 4.
The State Law
In response to enactment of the City's Ordinance, the State enacted Texas Local Government Code § 250.007(c) to preserve the right of landlords to decline to accept federal housing vouchers. Id. at 7. Section 250.007(c) bars municipalities and counties from adopting or enforcing any ordinance or regulation that prohibits a landlord "from refusing to lease or rent ... to a person because the person's lawful source of income to pay rent includes funding from a federal housing assistance program." Id.
Procedural Posture
In August 2017, the City filed this suit seeking to enjoin § 250.007(c) as preempted by federal law. Compl. [# 1]. The State now files a motion to dismiss which is ripe for review.
Analysis
The State argues the City's complaint must be dismissed because this Court lacks jurisdiction to entertain the City's claims and because, in the alternative, the City has failed to plead sufficient facts to state a plausible preemption claim. The Court first considers whether it has jurisdiction to hear the City's claims. As the Court finds it has jurisdiction, it then considers whether the City's complaint should be dismissed for failure to state a claim.
I. Motion to Dismiss for Lack of Jurisdiction
A. Legal Standard
A motion under Rule 12(b)(1) asks a court to dismiss a complaint for lack of subject matter jurisdiction. FED. R. CIV. P. 12(b)(1). "A case is properly dismissed for lack of subject matter jurisdiction when the court lacks the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss. ,
*754subject matter jurisdiction exists. MDPhysicians & Assocs., Inc. v. State Bd. of Ins. ,
B. Application
The State argues this Court lacks jurisdiction to hear the City's suit because (1) the City lacks standing and (2) the State is entitled to immunity under the Eleventh Amendment. Mot. Dismiss [# 21] at 7-12. The Court addresses these arguments in turn.
1. Standing
Article III of the Constitution limits the jurisdiction of federal courts to cases and controversies, and, in order to state a case or controversy, plaintiffs must establish they have standing to sue. U.S. Parole Comm'n v. Geraghty ,
Here, the City has demonstrated it has standing to sue. As an initial matter, the City has alleged an injury in fact because it alleges § 250.007(c) preempts the Ordinance. Am. Compl. [# 16] at 7. In the same way a state suffers an injury in fact when a federal law purports to preempt a law enacted by the state, a city suffers an injury in fact when the state enacts a law which purports to preempt a local ordinance. Cf. Texas v. United States ,
The City also meets the requirements of traceability and redressability because if the Court invalidates § 250.007(c) as preempted by federal law, then the City's Ordinance will no longer be unenforceable. Wyoming ,
*755see also Ohio ,
2. Eleventh Amendment Immunity
The Eleventh Amendment bars suits by private citizens against a state in federal court. Okpalobi v. Foster ,
The State argues Ex parte Young should not apply for two reasons, neither of which is persuasive. First, the State argues the Ex parte Young exception should not apply because the City has sued Attorney General Paxton and, according to the State, Attorney General Paxton lacks any "connection" to the enforcement of § 250.007. Mot. Dismiss [# 21] at 9-11. In fact, the State contends no state official possesses the ability to enforce § 250.007 because the provision does not specifically provide for its own enforcement.
Though the State argues otherwise, the Attorney General is not bereft of authority to enforce § 250.007. The City has sued Attorney General Paxton in his official capacity, and under the Texas Constitution, the Attorney General is the chief law enforcement officer of the state. Am. Compl. [# 16] at 1; Agey v. Am. Liberty Pipe Line Co. ,
Second, the State argues, in reliance on Okpalobi , that the Ex parte Young exception is not available until the State threatens or commences enforcement proceedings against the City. Mot. Dismiss [# 21] at 11-12. However, as the State correctly observes, the portions of Okpalobi that address Ex parte Young are not binding precedent. Okpalobi ,
Absent Fifth Circuit precedent to the contrary, this Court sees no reason to deviate from the Supreme Court's admonition that Ex parte Young requires only a "straightforward inquiry" into whether the complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective. Verizon ,
In short, the Court finds that the City has standing to bring its preemption claims and that these claims are not barred by the Eleventh Amendment. The Court therefore DENIES the State's motion to dismiss for lack of jurisdiction. These jurisdictional challenges resolved, the Court proceeds to consider whether the City fails to state a claim on which relief can be granted.
II. Motion to Dismiss for Failure to State a Claim
A. Legal Standard
The Federal Rules of Civil Procedure require each claim in a complaint include "a short and plain statement ... showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). The claims must include sufficient factual allegations, accepted as true, to state a claim for relief that is facially plausible. Ashcroft v. Iqbal ,
Motions to dismiss for failure to state a claim are appropriate when a defendant attacks the complaint because it fails to state a legally cognizable claim. FED. R. CIV. P. 12(b)(6). When a district court reviews a motion to dismiss pursuant to Rule 12(b)(6), it must construe the complaint in favor of the plaintiff and take all well-pleaded facts as true.
*757Gonzalez v. Kay ,
B. Application
The State argues the City fails to state a claim because (1) the City lacks a right of action to challenge § 250.007 as preempted by federal law and (2) the City has failed to plead sufficient facts in support of its preemption claims. The Court addresses each argument in turn.
1. Right of Action
The State's first argument-that the City lacks a right of action-is easily disposed of. The Fifth Circuit has repeatedly allowed suits seeking equitable relief on the basis of federal preemption to proceed under Ex parte Young . See, e.g. , Air Evac ,
2. Federal Preemption
The City puts forward two preemption arguments. First, the City argues § 250.007 is subject to conflict preemption because, by allowing landlords to choose whether or not to participate in the federal voucher program, § 250.007 stands as an obstacle to Congress's goals of assisting low-income families and promoting economically mixed housing. Resp. [# 24] 8-9 (citing 42 U.S.C. § 1437f(a) ). Second, the City argues § 250.007 is expressly preempted by
a. Conflict Preemption
Under the Supremacy Clause of the Constitution, state law is preempted to the extent it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Crosby v. Nat'l Foreign Trade Council ,
*758(citing Savage v. Jones ,
As an initial matter, the City has not identified any federal statute or regulation demonstrating a clear and manifest intent to preempt § 250.007, Wyeth ,
In lieu of any federal statutory provision or regulation indicating Congress intended to mandate landlords accept federal vouchers and participate in the federal voucher program, the City suggests legislative history supports its preemption claim and demonstrates a policy of voluntary landlord participation undermines the goals and objectives of Congress. See Resp. [# 24] at 9-10 (citing S. Rep. No. 104-195, at 31-32 (1995) ).Yet the legislative history relied on by the City actually tends to undercut the City's position, rather than support it.
The City cites only a single piece of legislative history-the Senate Committee Report accompanying the Public Housing Reform and Empowerment Act of 1996 (1996 Reform Act). Resp. [# 24] at 9-10. The 1996 Reform Act reworked a number of aspects of the federal housing voucher program, but two changes are particularly relevant here-the repeal of the "take one, take all" rule and the "endless lease rule." S. Rep. No. 104-195, at 31. The "take one, take all" rule required landlords who rented to one voucher holder to subsequently "rent to all otherwise qualified [voucher holders] and not to refuse to lease to such recipients" simply because they were participants in the voucher program, while the "endless lease" rule required landlords to renew leases for voucher holders.
The repeal of the "take one, take all" and "endless lease" rules demonstrates Congress has previously considered and rejected the idea of mandating landlord participation in the federal voucher program. Indeed, in rejecting even these lesser intrusions on landlord autonomy, the Senate Report accompanying the 1996 Reform Act appears to take for granted the voluntary nature of the federal voucher program. See
In sum, the City has failed to provide any basis for concluding Congress possessed a clear and manifest purpose to preempt state laws, such as § 250.007, which preserve the voluntary character of the federal housing voucher program.
b. Express Preemption by § 3615
Section 3615 invalidates any state or local law that "purports to require or permit any action that would be a discriminatory housing practice." The City argues § 250.007 permits a discriminatory housing practice because discrimination against voucher holders disproportionately impacts minority residents. Resp. [# 24] at 10-11; see also Tex. Dep't of Hous. & Cmty. Affairs v. Inclusive Cmtys. Project, Inc. , --- U.S. ----,
Though the Court has concerns about the viability of the City's disparate impact claim, neither of the State's purported arguments are persuasive. First, the City has identified a policy-voluntary landlord participation in the federal voucher program-which allegedly creates a barrier to fair housing. Am. Compl. [# 16] at 7-8. Second, the City has also pleaded a causal connection between this policy of voluntary landlord participation and disparate impact. According to the City, the policy of voluntary landlord participation restricts the housing choices available to participants in the federal voucher program. Id. at 3. Further, the City contends the large majority of individuals in the City who participate in the federal voucher program are African-American or Hispanic. Id. Together, these allegations suggest a policy *760allowing discrimination against voucher holders would disproportionately impact minorities. Absent any further argument from the State as to why the City's § 3615 preemption claim should be dismissed, the Court DENIES the State's motion to dismiss with respect to this claim.
c. Express Preemption by § 3617
Section 3617 renders it unlawful to "coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of" rights granted under the Fair Housing Act. Here, the City fails to identify any right that § 250.007 might interfere with or explain how § 250.007 might plausibly interfere with such a right. See Am. Compl. [# 16] at 5, 9. Given the Conclusory nature of the City's allegations with respect to § 3617, the Court GRANTS the State's motion to dismiss with respect to this preemption claim.
Conclusion
As to the State's motion to dismiss for lack of jurisdiction, the Court concludes the City possesses standing to bring its preemption claims and further concludes the City's claims against the State are not barred by the Eleventh Amendment. As to the State's motion to dismiss for failure to state a claim, the Court concludes the City fails to state a claim for conflict preemption or express preemption under § 3617. However, with respect to the City's express preemption claim in connection with § 3615, the Court concludes the State has failed to put forward sufficient justification to merit dismissal at this time.
Accordingly,
IT IS ORDERED the State's Motion to Dismiss for Lack of Subject Matter Jurisdiction and Failure to State a Claim [# 21] is GRANTED IN PART and DENIED IN PART as described in this opinion.
The City incorrectly labels its express preemption and conflict preemption claims as "statutory preemption" and "constitutional preemption" claims, respectively. See Am. Compl. [# 16] at 8-9.
In spite of the forgoing, the City contends the 1996 Reform Act demonstrates that Congress expected state and local antidiscrimination laws to step into the void created by Congress's abdication and did not intend to preempt state and local antidiscrimination requirements. Resp. [# 24] at 10. This confuses the issue. The question of whether Congress intended to preempt state and local antidiscrimination requirements is separate from the question of whether a state can validly enact a law preserving the voluntary character of the federal voucher program and invalidating contrary municipal regulations. Only the latter question is at issue here.
Nor has the City given any indication Congress intended to allow the City to mandate landlord acceptance of federal vouchers where the State has made a contrary choice. See Nixon v. Mo. Mun. League ,
Reference
- Full Case Name
- CITY OF AUSTIN v. Ken PAXTON, in his official capacity as Texas Attorney General, and Texas Workforce Commission
- Cited By
- 1 case
- Status
- Published