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Rowan Court Subdivision 2013 Ltd. Partnership v. The Louisiana Housing Cop.

United States District Court, M.D. Louisiana

September 12, 2017

ROWAN COURT SUBDIVISION 2013 LIMITED PARTNERSHIP, ET AL.
v.
THE LOUISIANA HOUSING COPORATION, ET AL.

          RULING AND ORDER

          JOHN W. deGRAVELLES UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the Federal Defendants' Motion to Dismiss Amended Complaint, (Doc. 59), filed by the United States Department of Housing and Urban Development (“HUD”) and the United States Department of the Treasury (“the Treasury”) (collectively, the “Federal Defendants”). Plaintiffs Rowan Court Subdivision 2013 Limited Partnership (“Rowan”) and John Does 1-60 (the “John Doe Plaintiffs”) (collectively, the “Plaintiffs”) oppose the motion. (Doc. 67). The Federal Defendants have also filed a reply in further support of their motion. (Doc. 73). Oral argument is not necessary.

         Having carefully considered the law, allegations of Plaintiffs' Amended Complaint, and arguments of the parties, the Federal Defendants' motion is granted, and Plaintiffs' claims against the Federal Defendants are dismissed.

         I. Relevant Factual Background

         A. Overview and Procedural History

         Plaintiffs bring this suit for relief related to the award of low-income housing tax credits and other federal funding available under 26 U.S.C. § 42. Plaintiffs assert claims under (1) the Due Process and Equal Protection clauses of the Fourteenth Amendment; (2) the Due Process clause of the Fifth Amendment; (3) Article 2, Section 1 of the Louisiana Constitution; and (4) Louisiana Civil Code articles 1967, 2315, and 2316. (Doc. 55 at 1). Plaintiffs claim that various defendants improperly evaluated Rowan's application for tax credits and federal funding related to the development of a housing subdivision and improperly awarded tax credits and funds to two other projects. The John Doe Plaintiffs are alleged to be individuals in Ouachita Parish who were adversely affected by these actions, specifically:

- John Does 1-34 are “the Ouachita Parish people who would have benefitted from affordable housing being provided” (Id. at 2);
- John Does 35-40 are “the Ouachita Parish contractors who would have worked on the construction jobs” (Id. at 3);
- John Does 41-50 are “the Ouachita Parish local businesses and their owners that did not receive the increase in business from the construction of the affordable housing” (Id.); and
- John Does 51-60 are “the Ouachita Parish citizens who lost the benefit of the increase in sales and property tax revenue the construction of affordable housing would have created.” (Id.)

         Plaintiffs allege that the Federal Defendants oversee and provide funds for the program at issue in this action.[1]

         Plaintiffs' claims were first raised in a Complaint filed in December 2015. (Doc. 1). The Federal Defendants moved to dismiss the Complaint, arguing that Plaintiffs lacked Article III standing, Plaintiffs had not established a valid waiver of sovereign immunity, and Plaintiffs' allegations were conclusory and failed to state a claim on which relief could be granted. (Doc. 21).

         On August 11, 2016, the Court granted the Federal Defendants' motion to dismiss, ruling that Plaintiffs had failed to demonstrate that the Federal Defendants waived sovereign immunity and had failed to state a claim on which relief could be granted. (Doc. 48 at 9). The Court did not reach the Federal Defendants' arguments concerning standing. (Id.) The Court granted Plaintiffs leave to amend but “strongly caution[ed]” Plaintiffs regarding their obligations under Federal Rule of Civil Procedure (“Rule”) 11. (Id.). Specifically, the Court opined that original Complaint's allegations “came close to” being impermissible under Rule 11, which states that an attorney filing a complaint certifies that the complaint's claims are warranted by existing law or a nonfrivolous argument to extend, modify, or reverse existing law or create new law. (See Id. at 9, 22).

         The operative Amended Complaint was filed in September 2016.[2] (Doc. 55).

         B. The Low Income Housing Tax Credit Program

         In Rowan Court Subdivision 2013 Limited Partnership v. Louisiana Housing Agency, 2015-1212 (La.App. 1 Cir. 2/24/16); 2016 WL 759121, writ denied, 2016-0591 (La. 5/20/16), 191 So.3d 1067, the Louisiana First Circuit Court of Appeal provided an overview of the low income ...


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