Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 1 of 18 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

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1 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 1 of 18 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 11-CV NAMBE PUEBLO HOUSING ENTITY, v. Plaintiff, UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD), Shaun Donovan, Secretary of HUD, Sandra Henriquez, Assistant Secretary for Public and Indian Housing, and Deborah Lalancette, Director, HUD s Office of Grants Management, National Office of Native American Programs, Defendants. PLAINTIFF'S STATEMENT OF RELIEF REQUESTED AND MOTION TO SUPPLEMENT THE RECORD JOHN FREDERICKS III Fredericks Peebles & Morgan LLP th Avenue Mandan, North Dakota Telephone: (303) Facsimile: (701) jfredericks@ndnlaw.com March 14, 2013 Attorney for Plaintiff

2 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 2 of 18 TABLE OF CONTENTS PAGE INTRODUCTION...1 THIS COURT S JURISDICTION UNDER THE ADMINISTRATIVE PROCEDURES ACT...1 I. This Court Has Jurisdiction to Disburse Funds Held in Escrow in Several of These Cases to Pay Any Deficiencies That the Court Finds Due for Any Fiscal Year. In Cases Where Funds Were Recaptured, Distribution of the Escrowed Funds is Ripe Without the Need for Additional Declaratory Relief....1 A. The Escrowed Funds in these Cases....1 B. This Court, Sitting as a Court in Equity Under 5 U.S.C. 705, Has Broad Authority and Discretion in the Disposition of the Escrowed Funds....2 C. Under the Court s Equitable Authority, the Court Can Order the Distribution of the Escrowed Funds to Provide Grant Entitlements Due for Any Fiscal Year, Regardless of the Fiscal Year From Which the Escrowed Funds Were Drawn....2 D. The Escrowed Funds are Ripe for Distribution Without Further Declaratory Proceedings....2 II. III. This Court Has Jurisdiction to Order HUD to Account to Plaintiffs for the Amounts Plaintiffs Have Been Deprived of Due to HUD s Illegal Actions and Order HUD to Restore to Plaintiffs the Grant Funds Due....2 The District Court Has Jurisdiction to Declare HUD s Actions Unlawful and to Enjoin HUD from Further Violations of NAHASDA....3 IV. Pursuant to 28 U.S.C. 1631, Once This Court Has Provided All the Relief that is Within Its Jurisdiction, Including Granting Over the Escrowed Funds, It Should Allow Individual Plaintiffs the Opportunity to Move to Transfer the Entirety of the Case to the Court of Federal Claims...6 i

3 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 3 of 18 V. This Case Should Not Be Remanded to the Agency Because Such Action Would Be Futile and Would Serve to Only Further Delay Relief to the Plaintiffs....7 PLAINTIFFS SHOULD BE ALLOWED, AND HUD SHOULD BE ORDERED, TO SUPPLEMENT THE ADMINISTRATIVE RECORD...9 I. This Court Should Allow Supplementation of the Administrative Record Because the Supplemental Material Was Indirectly Considered By HUD, Will Clarify the Record and Bring into Focus the Actions Taken By HUD During the Administrative Process....9 ii

4 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 4 of 18 CASES TABLE OF AUTHORITIES Appalachian Power Co. v. E.P.A., 477 F.2d 495 (4th Cir. 1973)... 9 Ass'n of Pacific Fisheries v. Environmental Protection Agency, 615 F.2d 794 (9th Cir. 1980) Axiom Resource Management v. United States, 564 F.3d 1374 (Fed. Cir. 2009) Bar MK Ranches v. Yuetter, 994 F.2d 735 (10th Cir. 1993)... 9 Bowen v. Massachusetts, 487 U.S. 879 (1988)... 3 Britell v. United States, 318 F.3d 70 (1st Cir. 2003)... 6 Chamber of Commerce v. Reich, 74 F.3d 1322 (D.C. Cir. 1996)... 7 Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)... 5, 7 Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971)... 9 Ctr. for Native Ecosystems v. Salazar, 711 F.Supp.2d 1267 (D. Colo. 2010)... 9 Exxon Corp. v. Dep't of Energy, 91 F.R.D. 26 (N.D. Tex. 1981) Finn v. U.S., 123 U.S. 227 (1887)... 3 Fort Peck Housing Authority v. HUD, 435 F.Supp.2nd 1125 (D. Colo. 2006) Kelly v. Railroad Retirement Bd., 625 F.2d 486 (3rd. Cir. 1980)... 8 i

5 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 5 of 18 Loveladies Harbor, Inc. v. United States, 27 F.3d 1545 (Fed. Cir. 1994)... 6 Metrex Research Corp. v. United States, 151 F.R.D. 122 (D. Colo. 1993) Middle Rio Grande Conservancy Dist. v. Norton, 294 F.3d 1220 (10th Cir. 2002)... 7, 8 Ross v. Colorado Outward Bound School, Inc., 822 F.2d 1524 (10th Cir. 1987)... 6 Sea-Land Serv., Inc. v. Alaska R.R., 659 F.2d 243 (D.C. Cir. 1981)... 7 Sierra Pacific Indus. v. Lyng, 866 F.2d 1099 (9th Cir.1989)... 7 Stone v. Heckler, 761 F.2d 530 (9th Cir. 1985)... 8 United States v. Tohono O'odham Nation, 131 S.Ct (2011)... 7 Wildearth Guardians v. U.S. Forest Serv., 713 F.Supp.2d 1243 (D. Colo. 2010)... 9 Zellous v. Broadhead Assocs., 906 F.2d 94 (3rd Cir. 1990)... 4 STATUTES 5 U.S.C , 3, 4 5 U.S.C U.S.C , 3 28 U.S.C U.S.C U.S.C U.S.C , 3 NAHASDA NAHASDA ii

6 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 6 of 18 RULES Rule 1006, Fed.R.Evid REGULATIONS 24 C.F.R C.F.R C.F.R. Part OTHER Erwin Chemerinsky, Federal Jurisdiction, 9.2, p. 616 (4th ed. 2003) Dan B. Dobbs, Law of Remedies 4.3(5) (2d ed. 1993)... 3 Kenneth Davis, Administrative Law Treatise 6-7 (2d ed. 1984)... 3 R. Fallon, D. Meltzer & D. Shapiro, Hart and Wechsler's The Federal Courts and the Federal System (4th ed. 1996)... 7 iii

7 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 7 of 18 INTRODUCTION Pursuant to this Court s Order entered November 19, 2012, as amended, setting the briefing schedule in these coordinated matters, Plaintiff, Nambe Pueblo Housing Entity ( NPHE ), hereby sets forth this Court s jurisdiction under the Administrative Procedures Act ( APA ) to effect the relief it is requesting in this case. The relief sought by each Plaintiff in these coordinated cases varies based on the facts peculiar to each Plaintiff. As a result, while there is some overlapping discussions, unlike the identical consolidated briefs filed earlier by the Plaintiffs, each brief filed by each Plaintiff needs to be separately read and considered. 1 In addition, NPHE sets forth its request for supplementation of the Administrative Record and the specific relief it is requesting. THIS COURT S JURISDICTION UNDER THE ADMINISTRATIVE PROCEDURES ACT I. This Court Has Jurisdiction to Disburse Funds Held in Escrow in Several of These Cases to Pay Any Deficiencies That the Court Finds Due for Any Fiscal Year. In Cases Where Funds Were Recaptured, Distribution of the Escrowed Funds is Ripe Without the Need for Additional Declaratory Relief. A. The Escrowed Funds in these Cases. This portion of the Statement of Relief pertains to those Plaintiffs who have escrowed funds. Because the FPHA does not have escrowed funds, the arguments made by other Plaintiffs under this section are omitted. 1 Each brief will include as Appendix "1" the specific relief sought by that Plaintiff. Several of the briefs will also include as an Appendix an expanded discussion of one or more specific remedies of particular interest to that Plaintiff

8 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 8 of 18 B. This Court, Sitting as a Court in Equity Under 5 U.S.C. 705, Has Broad Authority and Discretion in the Disposition of the Escrowed Funds. This portion of the Statement of Relief pertains to those Plaintiffs who have escrowed funds. Because the FPHA does not have escrowed funds, the arguments made by other Plaintiffs under this section are omitted. C. Under the Court s Equitable Authority, the Court Can Order the Distribution of the Escrowed Funds to Provide Grant Entitlements Due for Any Fiscal Year, Regardless of the Fiscal Year From Which the Escrowed Funds Were Drawn. This portion of the Statement of Relief pertains to those Plaintiffs who have escrowed funds. Because the FPHA does not have escrowed funds, the arguments made by other Plaintiffs under this section are omitted. D. The Escrowed Funds are Ripe for Distribution Without Further Declaratory Proceedings. This portion of the Statement of Relief pertains to those Plaintiffs who have escrowed funds. Because the FPHA does not have escrowed funds, the arguments made by other Plaintiffs under this section are omitted. II. This Court Has Jurisdiction to Order HUD to Account to Plaintiffs for the Amounts Plaintiffs Have Been Deprived of Due to HUD s Illegal Actions and Order HUD to Restore to Plaintiffs the Grant Funds Due. The Court has jurisdiction to grant Plaintiffs an accounting under 5 U.S.C. 702 and 706 and 28 U.S.C and Specifically, the Court has jurisdiction to order HUD to account to Plaintiffs for the amounts the Plaintiffs have been deprived of due to either the refusal of HUD to count in FCAS all the units in existence in 1997 or, alternatively, the units Plaintiffs continued to own and operate but which HUD refused to allow in FCAS because HUD said they should have been conveyed. Further, the Court has jurisdiction to order HUD to account to - 2 -

9 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 9 of 18 Plaintiffs for the amounts the Plaintiffs have been deprived of due to HUD's illegal recaptures where no funds were escrowed. Pursuant to 28 U.S.C. 2202, the Court has jurisdiction to grant "further necessary or proper relief based on a declaratory judgment or decree against any adverse party whose rights have been determined by such judgment." Id. The United States Supreme Court has held that when a court has jurisdiction under 5 U.S.C. 702 of the APA to review agency action, it also has authority to grant complete relief authorized by 706. See Bowen v. Massachusetts, 487 U.S. 879, 911 (1988). In these coordinated cases, this relief includes an accounting which courts sitting in equity routinely grant. See 1 Dan B. Dobbs, Law of Remedies 4.3(5) (2d ed. 1993). Plaintiffs have shown that HUD violated NAHASDA in numerous ways. The Court should cause HUD to recalculate the grants of each Plaintiff to determine the amounts owed but for HUD's illegal conduct and in accordance with the Court's orders and findings on the issues. 2 The Court should then order HUD to restore those funds to each Plaintiff. 3 III. The District Court Has Jurisdiction to Declare HUD s Actions Unlawful and to Enjoin HUD from Further Violations of NAHASDA. Only Congress can consent to suits against the United States. See, e.g., Finn v. U.S., 123 U.S. 227, 232, 233 (1887). This principle arose from English common law, which assumed that the King can do no wrong. Kenneth Davis, Administrative Law Treatise 6-7 (2d ed. 1984)(quoting Blackstone). A major exception to the doctrine of sovereign immunity is codified within the APA, where Congress authorizes the federal judiciary to adjudicate claims where the federal government or its officers have embarked on an illegal course of conduct. See 5 U.S.C. 702; Erwin Chemerinsky, Federal Jurisdiction, 9.2, p. 616 (4th ed. 2003). While the remedy 2 If the Court declines to order this accounting, then each Plaintiff will, and reserves the right to ask the Court for leave to further supplement the record with their own calculations. 3 Attached as Appendix "2" is an expanded discussion of the accounting/restoration remedy

10 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 10 of 18 of money damages is not available under the APA, the Court has broad discretion to fashion declaratory and injunctive relief against federal defendants. The Act's comprehensive provisions permit aggrieved persons to seek judicial review of agency action; 702 is explicit that sovereign immunity is waived when the relief sought is other than money damages. Zellous v. Broadhead Assocs., 906 F.2d 94, 96, 97 (3rd Cir. 1990). In light of the foregoing, there can be no dispute that this Court has jurisdiction to issue the following relief: a. Declare that HUD lacks authority to recapture funds without providing notice and a full hearing in accordance with Sections 401 and 405 of NAHASDA and 24 C.F.R ; b. Declare that HUD lacks authority to recapture funds unless a finding of substantial non-compliance is made at the requisite full hearing; c. Declare that HUD cannot recapture funds unless and until it has established the funds it seeks to recapture have not already been spent on affordable housing activities or in accordance with NAHASDA and thereafter: 1) declare that some or all of the funds that HUD seeks to recapture have already been spent on affordable housing activities or in accordance with NAHASDA; and 2) declare that some or all of the funds that HUD has recaptured had already been spent on affordable housing activities or in accordance with NAHASDA at the time of the recaptures; d. Enjoin HUD from recapturing such funds and order HUD to take such action as is within it s authority under existing law to restore said funds to Plaintiffs; e. Declare that 24 C.F.R is unlawful or that HUD s enforcement and application of 24 C.F.R is unlawful; - 4 -

11 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 11 of 18 f. Declare that all units Plaintiffs owned and operated but which were excluded from FCAS because of HUD's illegal and unlawful actions are entitled to FCAS funding and order HUD to restore said funds to Plaintiffs; g. Declare that all units that HUD forced Plaintiffs to convey pursuant to 24 C.F.R should not have been conveyed and should have been included as FCAS in the allocation formula for subsequent years until ready for conveyance as determined by Plaintiffs; and h. Declare that all units owned and operated by a Plaintiff as of September 30, 1997 must be included as FCAS in the allocation formula for subsequent years and order HUD to include said units in Plaintiff s FCAS funding. i. Declare that all low rent units owned and operated by a Plaintiff must be funded as low-rent units regardless of whether they were converted from mutual help or homeownership units to low rent units, and order HUD to fully fund such units as low-rent units. In each instance, the remedies sought by Plaintiffs require the Court to evaluate whether HUD has violated either a provision within NAHASDA, or a regulation promulgated under NAHASDA. Here, the first-step is to consider whether Congress has directly spoken to the precise question at issue; if the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 843 (1984). This Court has already ruled that, by making or threatening recapture without providing notice and hearing, HUD violated NAHASDA. This ruling falls within the first-step of the Chevron analysis and HUD s interpretation of the statutes and regulations is entitled to no deference. Id. As pled, the claims presented by the Plaintiffs against HUD and its officers - 5 -

12 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 12 of 18 support the full breadth of equitable relief available both under the APA and as a matter of federal common law. This Court has the jurisdiction necessary to refine its early decision, address the particularities of HUD s unlawful conduct as applied to each individual litigant, and fashion declaratory and injunctive relief that achieves equity. IV. Pursuant to 28 U.S.C. 1631, Once This Court Has Provided All the Relief that is Within Its Jurisdiction, Including Granting Over the Escrowed Funds, It Should Allow Individual Plaintiffs the Opportunity to Move to Transfer the Entirety of the Case to the Court of Federal Claims. If the Court determines it does not have jurisdiction under the APA to provide any Plaintiff with complete relief, 28 U.S.C provides the case can then be transferred to the Court of Federal Claims: [If the court where the action was originally filed] finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from which it is transferred. Id. This transfer statute has been broadly construed since enactment. Ross v. Colorado Outward Bound School, Inc., 822 F.2d 1524, 1527 (10th Cir. 1987). Indeed, transfers are presumed to be in the interest of justice. Britell v. United States, 318 F.3d 70, 74 (1st Cir. 2003). Because these cases would be transferred to the Court of Federal Claims, this Court should assure that all of the relief within its jurisdiction--including awarding the escrow funds, costs and attorneys fees--is provided before transferring the case to the Court of Federal Claims. This is to assure that there is no district court action pending at the time of transfer to the Claims Court in violation of 28 U.S.C See Loveladies Harbor, Inc. v. United States, - 6 -

13 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 13 of F.3d 1545 (Fed. Cir. 1994); United States v. Tohono O odham Nation, 131 S.Ct (2011). V. This Case Should Not Be Remanded to the Agency Because Such Action Would Be Futile and Would Serve to Only Further Delay Relief to the Plaintiffs. The Defendants may suggest that this court lacks jurisdiction to provide any relief other than a remand to the agency for further hearings. This argument fails for at least two reasons. First, it ignores the vital role of the federal courts as a check on unlawful agency action under the first-step of the Chevron analysis. Secondly, it disregards the fact that the waiver of sovereign immunity provided by the APA is distinct from, and broader than, the cause of action provided by the APA. See Chamber of Commerce v. Reich, 74 F.3d 1322, 1328 (D.C. Cir. 1996) (APA s waiver of sovereign immunity applies to any suit whether under the APA or not); Sea-Land Serv., Inc. v. Alaska R.R., 659 F.2d 243, 244 (D.C. Cir. 1981) (defense of sovereign immunity eliminated in actions for specific, non-monetary relief; legislative history explicitly states that the intent of the APA was to waive sovereign immunity in all equitable actions for specific relief against a federal officer acting in an official capacity ); R. Fallon, D. Meltzer, & D. Shapiro, Hart and Wechsler s The Federal Courts and the Federal System (4th ed. 1996) (pp ). ( Though codified in the APA, the waiver applies to any suit, whether under the APA, 1331, 1361, or any other statute ). Moreover, remand is not proper in this case because it will further delay the provision of relief to Plaintiffs and, in any event, is futile. As discussed above, a district court has jurisdiction and the power to provide equitable relief under APA cases. See Sierra Pacific Indus. v. Lyng, 866 F.2d 1099, 1111 (9th Cir.1989). The Tenth Circuit has ruled that plaintiffs may avoid remand when there has been great delay and the action an agency must take is obvious. See Middle Rio Grande Conservancy Dist. v. Norton, 294 F.3d 1220, 1226 (10th Cir. 2002). In - 7 -

14 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 14 of 18 Middle Rio Grande, the Fish and Wildlife Service failed to comply with certain federal statutes and as a result imperiled the habitat of the silvery minnow. Id. The Court determined remand was improper because Fish and Wildlife should have listed the silvery minnow habitat as a critical area almost immediately and to remand would create a large risk that the habitat would be destroyed prior to agency action. Id. at Though not binding to this court, other circuits have allowed plaintiffs to avoid remand when remand would create further delay in an already lengthy litigation. See Stone v. Heckler, 761 F.2d 530, 533 (9th Cir. 1985) (appeal decided more than five years after initial application for disability benefits); Kelly v. Railroad Retirement Bd., 625 F.2d 486, 496 (3rd. Cir. 1980) (four year delay). This Court should not order remand to HUD because it will cause unnecessary and additional lengthy delay in litigation that has already been in progress for years. This Court has already ruled that before HUD can recapture NAHASDA funds, Plaintiffs must be provided notice and an administrative hearing at which HUD must prove substantial non-compliance. It is uncontroverted HUD did not provide any Plaintiff with the administrative hearing required by NAHASDA. Further, HUD has already conceded that there has been no substantial noncompliance on the part of any Plaintiff and without establishing substantial noncompliance, HUD lacks the ability to recapture any funds. Thus, remand would be futile and only cause further delay because the outcome of any administrative hearing on remand is not in doubt due to HUD s inability to recapture the funds without proving substantial noncompliance. The actions before this Court fit within the category of cases where a Court may order that remand is unnecessary and order relief within its equitable powers

15 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 15 of 18 PLAINTIFFS SHOULD BE ALLOWED, AND HUD SHOULD BE ORDERED, TO SUPPLEMENT THE ADMINISTRATIVE RECORD I. This Court Should Allow Supplementation of the Administrative Record Because the Supplemental Material Was Indirectly Considered By HUD, Will Clarify the Record and Bring into Focus the Actions Taken By HUD During the Administrative Process. This Court may allow supplementation of the administrative record when the supplemental documents in question were considered by HUD decisions makers. The Tenth Circuit requires that the full administrative record must be before the court. See Bar MK Ranches v. Yuetter, 994 F.2d 735, 739 (10th Cir. 1993). The whole record consists of all documents and records that the agency used in reaching a decision. See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 420 (1971). The full record includes all documents considered both directly and indirectly by decision makers. See Ctr. for Native Ecosystems v. Salazar, 711 F.Supp.2d 1267, 1275 (D. Colo. 2010); Wildearth Guardians v. U.S. Forest Serv., 713 F.Supp.2d 1243, 1255 (D. Colo. 2010). Here, Plaintiffs are seeking to supplement the record with documents that HUD has already considered in the form of, inter alia, LOCCS draw downs and a unit-by-unit breakdown of units removed from FCAS. Those facts were either directly or indirectly considered by the HUD decision makers in reaching their decision to recapture funds. Though not explicitly considered by HUD, the documents serve as a compilation and summary of many documents considered by HUD decision makers. This Court has the power to allow for supplementation of the administrative record or order HUD to complete the administrative record when the record is incomplete or fails to explain the basis for an administrative action. Courts have required agencies to file a complete record or alternatively have allowed a plaintiff limited discovery. In Appalachian Power Co. v. E.P.A., 477 F.2d 495 (4th Cir. 1973), the Court pointed out that the whole record must be - 9 -

16 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 16 of 18 before the Court which includes documents considered by the administrative agency in reaching its decision. Id. at 506. The Court further articulated that this whole record was important in order to engage into a substantial inquiry of the agency s action. Id. The Court then ordered that the administrator should promptly certify the full record that was before him in reaching the agency s decision. Id. In short, completion of the record should be ordered and/or supplementation should be allowed when incompleteness was evident from the record itself. Exxon Corp. v. Dep't of Energy, 91 F.R.D. 26, 33 (N.D. Tex. 1981). This Court may also allow supplementation of non-record documents in order to clarify a complex or technical issue. The omission of such non-record documents would preclude this Court from effective judicial review. Axiom Resource Management v. United States, 564 F.3d 1374, 1380 (Fed. Cir. 2009). Non-record documents are added to the record when they are a clarification or an explanation of the original information before the Agency.... Ass n of Pacific Fisheries v. Environmental Protection Agency, 615 F.2d 794, 811 (9th Cir. 1980). This Court has allowed the introduction of non-record documents to explain the basis of a scientific test and its flaws. See Metrex Research Corp. v. United States, 151 F.R.D. 122, 123 (D. Colo. 1993). There, this Court allowed the supplementation because it served to explain or clarify technical terms or the subject matter involved in the agency action under review. Id. Like the supplements in Metrex Research, Plaintiffs proposed supplementation of the record, in the form of the unit-by-unit breakdown, will clarify the subject matter before the Court. The documents in question serve to clarify and summarize 4 the administrative record that currently stands at over one thousand (1,000) pages. The sheer amount of data presented along with the differing explanations for why homes were removed from FCAS presents a similarly 4 Rule 1006, Fed.R.Evid., provides that summaries of the type sought to be included in the present record are admissible in evidence

17 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 17 of 18 daunting area to confront. Further, the record here is obviously incomplete as, for example, HUD failed to delineate which units have been removed for which reason. Instead HUD simply removed large numbers of units from projects. This supplemental evidence will also promote efficient judicial review. The evidence will allow the court to determine whether the removal of individual units violated NAHASDA or was otherwise arbitrary and capricious. The summaries sought to be included in the administrative record will prevent this Court from having to decipher, organize, and decide on each individual unit the reason for removal and, conversely, why the Tribe did not convey the unit. Therefore, the summaries are essential to efficient judicial review. Finally, this Court has allowed extra-record material to be submitted in similar cases. In Fort Peck Housing Authority v. HUD, 435 F.Supp.2nd 1125 (D. Colo. 2006), the Court allowed in extra-record evidence in the form of non-party Tribe s resolution regarding the 24 C.F.R. Part 1000 housing formula and a letter from the same Tribe to HUD explaining the resolution and requesting that HUD review the housing formula. Fort Peck Housing Authority v. HUD, 05-M- 18, Document, Opening Brief. DATED: March 14, 2013 Respectfully submitted, FREDERICKS PEEBLES & MORGAN LLP s/ John Fredericks III John Fredericks III th Avenue Mandan, North Dakota Telephone: (303) Facsimile: (701) jfredericks@ndnlaw.com Attorney for Plaintiff

18 Case 1:11-cv RPM Document 56 Filed 03/14/13 USDC Colorado Page 18 of 18 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on March 14, 2013, I electronically filed the foregoing with the Clerk of Court using the ECF system which will send notification of such filing to the following addresses: timothy.jafek@usdoj.gov and I hereby certify that I have mailed or served the document or paper to the following non CM/ECF participants in the manner (mail, hand delivery, etc.) indicated by the nonparticipant s name: None s/ John Fredericks III John Fredericks III

19 Case 1:11-cv RPM Document 56-1 Filed 03/14/13 USDC Colorado Page 1 of 3 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch APPENDIX 1 NPHE SPECIFIC CLAIMS FOR RELIEF (1) For fiscal years , Nambe Pueblo Housing Entity ( NPHE ) seeks an order declaring that (a) HUD lacks the authority to recapture funds without providing a formal hearing and a finding of substantial non-compliance in accordance with Sections 401 and 405 of NAHASDA prior to its amendment in October, 2008 and 24 C.F.R , together with an injunction prohibiting HUD from recapturing or otherwise adjusting NPHE s funding without complying with said requirements, and (b) HUD unlawfully recaptured $122, from the NPHE for fiscal years because it failed to provide a formal hearing and a finding of substantial non-compliance. See Nambe Housing AR Vol. III, Tab NPHE seeks an additional order requiring HUD to take such action as is within its authority under existing regulations and law to restore the unlawfully recaptured funds via grant funding adjustment(s) (2) For fiscal years , NPHE seeks an order declaring that HUD cannot recapture funds unless and until it has been established that the funds it seeks to recapture have not already been spent on affordable housing activities or in accordance with NAHASDA. 1 The amount HUD intended to recapture for fiscal years far exceeds the actual amount it has recaptured to date. See Nambe Pueblo Hous. Entity v. United States HUD, 2012 U.S. Dist. LEXIS , *9-11, 13 (D. Colo. Sept. 4, 2012) (noting that HUD intended to recapture a total of $212,338); see also Def. RA E and G, confirming that these amounts were for fiscal years The actual amount recaptured ($122,583.) should therefore be attributed to fiscal years In addition to the Administrative Record a fiscal year by year breakdown of funds recaptured can be found on spreadsheets under column T at HUD s website: nap/ihbgformula

20 Case 1:11-cv RPM Document 56-1 Filed 03/14/13 USDC Colorado Page 2 of 3 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch With respect to NPHE s claims (1) and (2), The United States Supreme Court has held that a grant-holder's obligations normally should be "evaluated by the law in effect when the grants were made," Bennett v. New Jersey, 470 U.S. 632, 640, (1985) (emphasis added), not by the law "in effect at the time" the court "renders its decision," Bradley v. School Board, 416 U.S. 696, 711 (1974); see Project B.A.S.I.C. v. O'Rourke, 907 F.2d 1242, 1246 (1st Cir. 1990). This is so because it is difficult, and sometimes unfair, to make a grantholder abide by new (post-grant) statutory obligations Bennett, 470 U.S. at 640. Thus, although the agency action in this case was challenged by NPHE after the 2008 amendments to section 401(a) of NAHASDA, the court is still obligated, under Bennett, to apply the law in effect at the time NPHE grants were made, not the law in effect when the agency actions were challenged. NPHE's final grant allocation for fiscal year 2008 was made on March 24, AR Vol II Tab 38. The 2008 amendment became law approximately 7 months later on October 14, 2008, after the 2008 grant was made. Accordingly, the court should evaluate the actions taken on the grants under section 401 (a) prior to its amendment. NPHE respectfully requests that the court reconsider its prior ruling on this issue, see Nambe Pueblo Hous. Entity, 2012 U.S. Dist. LEXIS , * (3) NPHE seeks an order declaring that the pre-2008 version of NAHASDA required HUD to fund each TDHE based on the number of units subject to an ACC on September 1997 (September 1997 ACC unit count). (4) NPHE seeks an order declaring that 24 C.F.R and HUD Guidance are unlawful or that HUD s enforcement and application of said regulation and Guidance are unlawful, (b) declaring that all units Plaintiff owned and operated but which were excluded from FCAS because of HUD s illegal and unlawful action are entitled to FCAS funding until such time as the units were ready for conveyance as determined by Plaintiff, and order HUD to take 2

21 Case 1:11-cv RPM Document 56-1 Filed 03/14/13 USDC Colorado Page 3 of 3 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch such action as is within its authority under existing regulations and law to restore the unlawfully recaptured funds via grant funding adjustment(s), and (c) declaring that all units that HUD forced Plaintiff to convey pursuant to its illegal application of 24 C.F.R and Guidance instead should have been included as FCAS in the allocation formula for subsequent years until such time as the units were ready for conveyance as determined by Plaintiff. and (d) order HUD to provide an accounting of the units and the grant funds attributable to the units that were illegally excluded and order HUD to take such action as is within its authority under existing regulations and law to restore the funds via grant funding adjustment(s) (5) NPHE seeks an order declaring that all low rent units owned and operated by Plaintiff must be funded as low-rent units regardless of whether they were converted from mutual help or homeownership units to low rent units, and order HUD to fully fund such units as low-rent units. (6) NPHE seeks an award of costs and attorneys' fees incurred herein. 3

22 Case 1:11-cv RPM Document 56-2 Filed 03/14/13 USDC Colorado Page 1 of 8 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch APPENDIX 2 II. This Court Has Jurisdiction to Order HUD to Account to Plaintiffs for the Amounts Plaintiffs Have Been Deprived of Due to HUD s Illegal Actions, and Restore to Plaintiffs the Grant Funds Due from NAHASDA Carry-Over Funds. The Court has jurisdiction to grant Plaintiffs an accounting under 5 U.S.C. 702 and 706 and 28 U.S.C and Specifically, the Court has jurisdiction to order HUD to account to Plaintiffs for the amounts the Plaintiffs have been deprived of due to either the refusal of HUD to count in FCAS all the units in existence in 1997 or, alternatively, the units Plaintiffs continued to own and operate but which HUD refused to allow in FCAS because HUD said they should have been conveyed. Further, the Court has jurisdiction to order HUD to account to Plaintiffs for the amounts the Plaintiffs have been deprived of due to HUD's illegal recaptures where no funds were escrowed. Pursuant to 28 U.S.C. 2202, the Court has jurisdiction to grant "further necessary or proper relief based on a declaratory judgment or decree against any adverse party whose rights have been determined by such judgment." Id. The United States Supreme Court has held that when a court has jurisdiction under 5 U.S.C. 702 of the APA to review agency action, it also has authority to grant complete relief authorized by 706. See Bowen v. Massachusetts, 487 U.S. 879, 911 (1988). In these coordinated cases, this relief includes an accounting which courts sitting in equity routinely grant. See 1 Dan B. Dobbs, Law of Remedies 4.3(5) (2d ed. 1993). There are two factors that determine whether or not 702 will prevent judicial review of agency action: first, whether a complaint seeks declaratory and injunctive relief, which is clearly not an action for money damages, and second, whether the monetary aspects of the relief sought are "money damages" as the term is used in the law, as opposed to specific relief. Id. at 893.

23 Case 1:11-cv RPM Document 56-2 Filed 03/14/13 USDC Colorado Page 2 of 8 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch The Supreme Court has long recognized the distinction between an action at law for damages and an equitable action for specific relief. Bowen, 487 U.S. at 893. The former "are intended to provide a victim with monetary compensation for an injury to his person, property, or reputation" and the latter "may include an order providing for the reinstatement of an employee with backpay, or for the recovery of specific property or monies, ejectment from land, or injunction either directing or restraining the defendant officer's actions." Id. at 893 (emphasis in original) (internal quotes omitted). The mere fact that a judicial remedy may require one party to pay money to another party should not confuse the question as to whether such payment is money as damages or as specific relief. Id. at , 900. "Damages are given to the plaintiff to substitute for a suffered loss, whereas specific remedies are not substitute remedies at all, but attempt to give the plaintiff the very thing to which he was entitled." Bowen, 487 U.S. at 895 (quoting Maryland Dept. of Human Resources v. Department of Health and Human Services, 763 F.2d 1441, 1446 (U.S. App. D.C. 1985)) (emphasis in original) (internal quotes and citations omitted). The Court in Bowen recognized, for example, that orders of relief that require a town to reimburse parents for educational costs that Congress intended the town to pay is not "damages" as that term is used at law. Id. at 894 (citing School Committee of Burlington v. Department of Education of Massachusetts, 471 U.S. 359, (1985).) Furthermore, injunctive relief may take the form of reimbursement of funds which were improperly recaptured. See Clark v. Library of Congress, 750 F.2d 89, 104 n. 33 (D.C. Cir. 1984)(referencing Martinez v. Marshal, 573 F.2d 555, 560, 561 (9th Cir. 1977)(holding that sovereign immunity does not bar an action to compel a government official to repay money improperly recouped). 2

24 Case 1:11-cv RPM Document 56-2 Filed 03/14/13 USDC Colorado Page 3 of 8 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch In a variety of situations, the federal courts have applied Bowen in APA cases to order the government to pay money. For example, in Holly Sugar Corp. v. Veneman, 355 F.Supp.2d 181 (D.D.C. 2005), rev d. on other grounds 437 F.3d 1210 (D.C. Cir. 2006), plaintiffs challenged the U.S. Department of Agriculture's interpretation of the Fair Agriculture Improvement and Reform Act of 1996 and sought the return of a one percent assessment levied by the Department. In rejecting the government's position that the APA did grant the district court the jurisdiction to order the money returned to the plaintiffs, the Holly Sugar court discussed Bowen: In Bowen, the State of Massachusetts, a long time participant in the federal government's Medicaid programs, provided medical and rehabilitative services to mentally handicapped individuals through the State's Department of Mental Health and Education. 487 U.S. at 886. The Secretary of the United States Department of Health and Human Services ("HHS") determined that only the services provided by the State's mental health employees qualified for reimbursement under the Medicaid program. Id. at 887. Therefore, reimbursement for the services provided by the State's education department were disallowed by HHS "as uncovered education services." Id. at 886. In response to HHS's decision, the State of Massachusetts filed suit in federal court under the APA, seeking reimbursement for the expenditures related to the services provided by its education department employees. Id. at 887. The Secretary of HHS argued in Bowen that Massachusetts should have brought its case in the United States Court of Federal Claims under the Tucker Act and that the APA did not vest jurisdiction in the district court because the State's claim was not an action "seeking relief other than money damages." Id. at , 108 S.Ct However, the Bowen Court decided that "the fact that a judicial remedy may require one party to pay money to another is not a sufficient reason to characterize the relief as `money damages.'" Id. at 893. Instead, the Court viewed the district court's reversal of the Medicaid disallowance decision not as an award for damages, but rather as an "adjustment." Id. Moreover, the Court noted that "Congress has used the terms `overpayment' and `underpayment' to describe such adjustments... and that the specific agency action that reverses a disallowance decision is described as `restitution' in the statute." Id. The Supreme Court concluded that because the State sought specific relief to invalidate the Secretary's refusal to reimburse the State, as opposed to recovering money damages, the case was properly within the district court's jurisdiction. Id. at 910. Thus, the Court affirmed the district court's decision permitting the State to pursue the claim. 3

25 Case 1:11-cv RPM Document 56-2 Filed 03/14/13 USDC Colorado Page 4 of 8 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch Holly Sugar, 355 F.Supp.2d at 192, 193. See also Zellous v. Broadhead Associates, 906 F.2d 94, 98 (3d Cir. 1990)(finding APA jurisdiction to order the payment of money where the plaintiff tenants "[did] not seek compensatory damages for injuries they allegedly suffered as a result of HUD's failure to make timely adjustments in the utility allowance. They seek to enforce both prospectively and retrospectively the mandate contained within the [applicable statute]"); Olenhouse v. Commodity Credit Corp., 136 F.R.D. 672, 676, (D. Kansas 1991)(APA jurisdiction proper where suit was not one "seeking money in compensation for the damage sustained by the failure of the Federal Government to pay as mandated; rather, it was a suit seeking to enforce the statutory mandate itself, which happens to be one for the payment of money"). Thus, under the Supreme Court's analysis in Bowen, and the cases following it, an order instructing HUD to refund to the Plaintiffs specific property--the amounts recaptured by HUD and the amounts the Plaintiffs have been deprived of due to either the refusal of HUD to count in FCAS all the units in existence in 1997 or, alternatively, the units Plaintiffs continued to own and operate but which HUD refused to allow in FCAS because HUD said they should have been conveyed--is a form of specific relief authorized by the APA, not money damages, and therefore within the Court's jurisdiction to grant. Accord, Nat'l Ctr. for Mfg. Sciences v. U.S., 114 F.3d 196, 200 (Fed. Cir. 1997). Plaintiffs recognize this court declined to order the award of grant funds to Fort Peck Housing Authority in denying Fort Peck s Rule 59 motion in Fort Peck Housing Authority v. United States Department of Housing and Urban Development, Case No. 05-cv (D. Colo, August 1, 2006). It did so, however, on the basis that the funds sought had already been expended, and that awarding different funds would be substitute relief, and hence damages. 4

26 Case 1:11-cv RPM Document 56-2 Filed 03/14/13 USDC Colorado Page 5 of 8 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch In this case, however, the undersigned Plaintiffs are seeking grant payments from grant funds that have not been expended, are not tied to any particular fiscal year, and for which HUD has wide discretion in their expenditure what HUD refers to as carry-over funds. For all fiscal years since the inception of NAHASDA, in annual letters to Tribal leaders regarding final NAHASDA Indian Housing Block Grant (IHBG) allocations, 1 HUD identifies carry-over funds that are to be distributed in addition to the current fiscal year appropriations. In the letters, HUD states that these funds include undistributed FY [year immediately preceding letter] funds, Letter dated December 9, 1998 from HUD to Tribal Leader, RA Vol. 1, Tab 6, AT000103; carry-over of undistributed FY [year immediately preceding letter] funds, Letter dated December 3, 1999 from HUD to Tribal Leader, RA Vol. 1, Tab 9, AT000125; the net amounts of repayments collected in [the immediately preceding] FY after grant adjustments and backfunding, Letter dated April 22, 2009 from HUD to Tribal Leader, RA Vol. I, Tab 28, AT000525; or as carry-over funds, plus [dollar amount], the net amount of repayments collected in [the immediately preceding] FY after grant adjustments. Letter dated March 10, 2010 from HUD to Tribal Leader, RA Vol. I, Tab 30, AT Indeed, according to HUD s Grants Management Team Leader for NAHSADA, funds recaptured from Fort Peck s 1998 and 2000 grants were reallocated to other tribes as part of the latter s FY 2003 grants. See 1 Note that HUD also sends another series of letters to the Tribal Leaders identifying estimated IHBG formula allocations for an upcoming fiscal year. See, e.g., Letter dated July 30, 2004 from HUD to Tribal Leader, RA Vol. I, Tab 18, AT HUD is required by federal regulation to provide these allocation estimates annually and they are made in advance of each annual federal appropriation and, therefore, do not and cannot contain the carry-over figures. See 24 C.F.R Carry-over dollar amounts remain unknown until the end of each fiscal year after each eligible tribal recipient has either claimed or waived their formula allocation and HUD s recapture activities are completed. See, e.g., 24 C.F.R to and Under this practice, tribal IHBG recipients have no expectation of receiving any particular amount of carry-over funds in a given fiscal year. 5

27 Case 1:11-cv RPM Document 56-2 Filed 03/14/13 USDC Colorado Page 6 of 8 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch Declaration of Jacqueline A. Kruszek, paragraphs 4 & 5, Fort Peck Housing Authority v. United States Department of Housing and Urban Development, Case No. 05-cv (D. Colo.), Docket No. 43. This statement comports with the NAHASDA regulations at 24 C.F.R which provides, What happens to NAHASDA grant funds adjusted, reduced, withdrawn or terminated under or ? Such NAHASDA grant funds shall be distributed by HUD in accordance with the next NAHASDA formula allocation. The amount of carry-over funds that have been available throughout the history of the NAHASDA program range anywhere from approximately $3.1 million, to $17.5 million in a given fiscal year. See Letter dated December 3, 1999 from HUD to Tribal Leaders ($3,197,404), supra; and Letter dated January 14, 2005 from HUD to Tribal Leaders ($17,566,300), RA Vol. I, Tab 19, AT HUD has made a routine practice of using the IHBG formula allocation process to disburse to tribal recipients unclaimed and recaptured funds from past fiscal years in each NAHASDA funding cycle. Those carry-over funds are a potential source of relief for the Plaintiffs in this action. Moreover, it is critical to understand that, unlike most appropriations, annual NAHASDA appropriations are not tied to a particular fiscal year, but are fungible old fiscal year money can be used to pay current year program activities (such as the carry-over funds), and visa versa (i.e., new money can and has been used to pay retroactive liabilities, just as in this case. For example, under HUD s NAHASDA regulations, when funds are recaptured from an earlier fiscal year, they are reallocated to other tribes to augment those tribes grants in the later fiscal year in which the recapture occurred. 24 C.F.R That is precisely what happened with the funds recaptured in these cases they were used to augment other tribes grants in subsequent fiscal years. See Declaration of Kruszek, supra. Further, HUD s regulations also provide that, if a tribe 6

28 Case 1:11-cv RPM Document 56-2 Filed 03/14/13 USDC Colorado Page 7 of 8 Nambe Pueblo Housing Entity v. U.S. Department of HUD, et. al Case No. 11-CV Judge Richard Matsch wins an administrative appeal after the challenged fiscal year has expired (and presumably after all of that fiscal year s funds have been distributed to other tribes), HUD will take subsequent fiscal year funds and retroactive[ly] increase that prior year s grant, using the subsequent fiscal year s appropriation. 24 C.F.R (e)(4)(i). Additionally, and in a use of funds that is indistinguishable from Plaintiffs request for relief here, in FY 2008, and using only FY 2008 funds, HUD backfunded successful recipient challenges for fiscal years prior to The scope and amount of this backfunding was substantial. 2 HUD described the process as follows: [I]n accordance with the revised IHBG formula regulations that were published in the Federal Register on April 20, 2007, and became effective May 20, 2007, these [2008] allocations incorporate back-funding for any under-count of units that occurred and was reported or challenged prior to October 30, As part of the changes to and , and, as noted in the preamble to the revised IHBG formula regulations, HUD agreed to such back-funding.in total, $26,126,845 of FY 2008 IHBG funds was distributed based on this back-funding provision. Letter dated March 24, 2008 from HUD to Tribal Leaders, RA Vol. I, Tab 26, AT000492, 494. Further, HUD routinely distributes to Tribes the carry-over funds and repayments it has collected from prior years. See, e.g., HUD Letters to Tribal Leaders, supra. As the Court of Federal Claims has recently held, NAHASDA is a permanent revolving appropriation. Any unused funds remain in NAHASDA and are rolled over and included in the following year s appropriation. Yakama Housing Authority v. United States, 102 Fed.Cl. 2 During a negotiated rulemaking session, HUD has agreed to provide back funding for any undercount of units that occurred and was reported or challenged prior to October 30, THRHA Proposed Supplemental Record, Exhibit 3 at 72 Fed.Reg The per-tribe amount of backfunding was often substantial. The Tlingit Haida Regional Housing Authority, for example, received $343,484. THRHA Rec The 9-page list of tribes and projects eligible to receive FY 2008 funds to pay grant obligations for FY 2002 and earlier is contained in each Plaintiff's Administrative Record. See, e.g., THRHA Rec. 474, et seq.; NHA Admin. Rec. AR000395, et seq. 7