City of Joliet, Illinois v. New West, L.P.
City of Joliet, Illinois v. New West, L.P.
Opinion
This appeal is
New West V
in a saga that began in 2005 when Joliet proposed to condemn and raze the Evergreen Terrace apartments as a public nuisance. By 2017 the district court had held that Joliet is entitled to condemn the buildings, had set just compensation at about $15 million, and had held that New West cannot obtain relief against the City under federal housing-discrimination statutes.
New West, L.P. v. Joliet
,
Back in the district court, however, the parties disputed the status of a reserve fund, worth about $2.8 million, that the Department of Housing and Urban Development held to provide for the needs of the federally subsidized apartment complex. The City asked the judge to order HUD to transfer these funds to an account for Joliet's benefit. New West opposed this motion, contending that the money in the reserve fund came from rents to which it was entitled by contract with HUD and that, once it no longer had responsibility for the apartment buildings, HUD must write it a check.
The district court recognized that the status of the reserve fund had not been part of either the City's condemnation proceeding or New West's housing-discrimination suit. Nonetheless, the court proceeded to resolve the motion on the merits. It rejected New West's claim of ownership, concluded that the fund should accompany the buildings, and ordered: "Defendants shall deposit the Reserves in an account or accounts designated by Joliet for the benefit of the Properties, as determined by HUD." New West asked the judge to reconsider, but he declined.
The judge did not say much about why he came to this conclusion. And an order requiring "[d]efendants" to transfer the money is anomalous, for the defendants are New West and its fraternal business New Bluff. They lack ability to transfer the money to themselves or anyone else. HUD controls the reserve fund and is the only entity that can use (or direct its use) for the benefit of Joliet or disburse it to New West. But HUD was dismissed as a party in 2013. As part of a sellement that year, HUD agreed that it could be reinstated as a party if necessary to resolve a dispute about the reserves. But that was *695 not done. HUD was not a party when the district court acted and is not a party now, so the district court lacked authority to issue orders requiring HUD to do anything. The orders appealed from are ineffectual.
Instead of prolonging this condemnation suit, which reached its end in 2016, when
Joliet v. New West, L.P
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One natural place for a new suit would be the Court of Federal Claims. New West contends that it owns the reserve fund as a result of contracts between itself and HUD, read in light of regulations that (New West believes) require release of the funds if the subsidized parcel is sold. In other words, New West wants a court to order the federal government to pay it a sum of money. The Tucker Act,
Until oral argument of this appeal the litigants, the district judge, and HUD (appearing as amicus curiae ) all had ignored the Tucker Act. Indeed, they had ignored the fact that HUD is not a party and that the district court's directive to "[d]efendants" ordered the impossible. We asked the parties, plus HUD, to file supplemental memoranda addressing these subjects. HUD and New West both replied that 42 U.S.C. § 1404a permits litigation about the reserves to occur in the district court, in a newly filed suit against HUD. This is not as clear to us as it is to the parties.
Section 1404a permits HUD to "sue and be sued ... with respect to its functions under the United States Housing Act of 1937". According to New West, the status of the reserve fund is a "function[ ] under the United States Housing Act of 1937". Yet New West principally relies on its housing-subsidy contract with HUD, not on the terms of any statute. Indeed, at oral argument counsel for all sides represented that the statute does not resolve this dispute.
But
*696
One decision,
United States v. Adams
,
New West thus has a choice: the district court or the Court of Federal Claims. It cannot pursue both options at once, however. See
The district court's decision is vacated.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.