TRINKA A. TURNER, et al., Plaintiffs,
THOMAS VILSACK, et al., Defendants.
Michael Pijanowski, Leslea Smith, Spencer Neal, Edward Johnson, Oregon Law Center, Hillsboro, OR, Attorneys for Plaintiffs.
S. Amanda Marshall, United States Attorney, Sean E. Martin, Assistant United States Attorney, Portland, OR, Attorneys for Defendants.
OPINION AND ORDER
MICHAEL H. SIMON, District Judge.
This matter is before the Court on Plaintiffs' Motion for Preliminary Injunction (Dkt. 6). Plaintiffs request that the Court preliminarily enjoin Defendants, officials with the United States Department of Agriculture ("USDA") and its Rural Development ("RD") and Rural Housing Service, from proceeding with the foreclosure sale of Jandina Park Apartments ("Jandina"), where Plaintiffs reside. For the reasons stated below, Plaintiffs' motion is granted.
A preliminary injunction is an "extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter v. Natural Resources Defense Council, 555 U.S. 7, 22 (2008). A plaintiff seeking a preliminary injunction generally must show that: (1) he or she is likely to succeed on the merits; (2) he or she is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in his or her favor; and (4) that an injunction is in the public interest. Winter, 555 U.S. at 20 (rejecting the Ninth Circuit's earlier rule that the mere "possibility" of irreparable harm, as opposed to its likelihood, was sufficient, in some circumstances, to justify a preliminary injunction).
The Supreme Court's decision in Winter, however, did not disturb the Ninth Circuit's alternative "serious questions" test. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131-32 (9th Cir. 2011). Under this test, "serious questions going to the merits and a hardship balance that tips sharply toward the plaintiff can support issuance of an injunction, assuming the other two elements of the Winter test are also met." Id. at 1132 (quotation marks omitted). Thus, a preliminary injunction may be granted "if there is a likelihood of irreparable injury to plaintiff; there are serious questions going to the merits; the balance of hardships tips sharply in favor of the plaintiff; and the injunction is in the public interest." M.R. v. Dreyfus, 697 F.3d 706, 725 (9th Cir. 2012) (citing Cottrell ).
Plaintiffs are low-income tenants in Jandina, a 36-unit apartment building that is part of the USDA's RD housing portfolio. Through the RD program, Plaintiffs receive subsidies that enable Plaintiffs to pay no more than 30 percent of their income for rent and utilities. These subsidies may be transferred (or "ported") to another RD housing project, if there are available vacant units. Vacancies in such units vary as persons move in and out, but as of November 7, 2013, there were approximately nine available units within 35 miles of Jandina. There are 24 units in Jandina that receive rental assistance subsidies.
Plaintiffs cannot afford to pay market rent at Jandina or elsewhere. Plaintiffs also cannot afford to pay moving costs to relocate. If Jandina is sold at foreclosure to anyone other than the USDA, Plaintiffs face the threat of homelessness. Plaintiff Trinka Turner also faces the threat of losing custody of her two children, because she was previously denied custody for not having stable housing and was then granted custody only after moving into Jandina.
Through the RD program the USDA loans money on favorable terms for the development of low-income housing. In these circumstances, the USDA acts generally only as the lender. With Jandina, however, the USDA has a more substantive role. In 1989, the USDA loaned money for the development and operation of Jandina as low-income housing. In 1996, the USDA was appointed as the receiver of Jandina, and continues to serve in that capacity. In its role as receiver, the USDA is the day-to-day manager of Jandina, through a management company retained by the USDA. Thus, the USDA is, and has been since 1996, ultimately responsible for the physical condition of Jandina.
In 2009, the USDA accelerated its loan to the developer of Jandina and notified the tenants of Jandina that the USDA was planning to liquidate its interest in the property. In April 2013, the USDA formally recorded an updated notice of acceleration and set a nonjudicial foreclosure for September 2013. The foreclosure sale was later moved to November 21, 2013. The USDA sent notification letters to the tenants of Jandina regarding the pending foreclosure sale. In early September 2013, Agency representatives held a meeting with the tenants to provide information regarding the foreclosure sale and the tenants' rights after foreclosure. On October 24, 2013, Plaintiffs filed the Complaint in this action, seeking an injunction and alleging that Defendants' conduct violated the Administrative Procedure Act ("APA") and the Due Process Clause of the United States Constitution. On October 31, 2013, Plaintiffs filed the pending motion for a preliminary injunction. The Court held a hearing on the motion on November 14, 2013.
The Court finds that Plaintiffs meet their burden of showing that there are serious questions going to the merits of their claims, the balance of the equities tip sharply in their favor, they are likely to suffer ...