Lockey and MacKenzie Win a Round In Federal Court Housing Case, Open a Can of Worms

HUD Secretary Julian Castro
HUD Secretary Julian Castro
Michael Reynolds, EPA

You know what? That new housing policy the Dallas City Council is working on, Julian Castro’s bright shiny political future,  Mayor Mike Rawlings’ next move, the rep that this city has earned in recent days for dealing with demons of the past — now might be too early to lay down any big bets on any of that stuff.

Craig MacKenzie, one of the pair of developers litigating against City Hall for six years over housing policy, won a significant round in federal court this week. That doesn’t mean he will prevail in the end, but it keeps his suit alive, and the suit, as he described it to me the other day on the phone, is “a real attack against HUD, against the politics, against all of it.”

Specifically, if MacKenzie and his partner in this long battle, Curtis Lockey, were to get what they want out of their new lawsuit, the “VCA” or voluntary compliance agreement between HUD and Dallas on desegregation would go flying out the window as an illegal pact, maybe even a conspiratorial act to thwart the law. One assumes whatever housing policy the city has adopted by then as its portion of that agreement would go flying out with it. 

And then there is the provocative matter of a meeting that Mayor Rawlings and HUD Secretary Castro took in the fall of 2014, after which Castro, newly appointed to the Obama cabinet, trashed a four-year federal investigation of segregation in Dallas and basically let Dallas off the hook. The findings of that investigation are at the core of the lawsuit filed last year by MacKenzie and then joined by Lockey.

In fact, you know what? I don’t think any of us should make up our minds about segregation in this city — why it still exists, how it continues to exist — until this lawsuit gets sorted out. Fifty-two years after passage of the Civil Rights Act, we ought to be able to look at the persistence of extreme disparities along racial lines in our midst and figure out that something isn’t working. No matter who wins this lawsuit, the question in it goes straight to that fundamental issue: What have we been doing wrong about race and how can we stop it?

Lockey and MacKenzie had a city sponsored deal in 2009 to redevelop the old LTV Tower at 1600 Pacific Ave. downtown. In an avalanche of litigation worthy of a Dickens novel, they have argued for six years that City Hall pulled the plug on their deal when city officials learned it would be racially integrated in compliance with federal law.

Not surprisingly for two private citizens up against the local, state and federal governments, Lockey and MacKenzie have taken some drubbings and defeats, probably kicked out of the courthouse more times than the homeless guy with the pet pit bull. But this week’s ruling by U.S. District Judge Sidney Fitzwater was a big turnaround.

The lawsuit before Fitzwater, crafted originally by MacKenzie himself without a lawyer and modified since, takes aim directly at the behavior of Castro and other HUD officials in letting Dallas off the hook. MacKenzie argues that HUD broke the law by cutting Dallas all kinds of breaks not allowed by federal law and also by failing to act on its own investigative findings in ways required by law.

HUD answered the suit by telling Fitzwater that he lacked jurisdiction to entertain MacKenzie’s complaint. HUD said it had made its decisions about Dallas well within the discretion allowed to federal agencies by the federal Administrative Procedures Act (APA). As long as an agency acts within that margin of discretion, it is immune from suit by federal law.

Fitzwater has been sitting on the jurisdiction issue — well, considering it — for months. Tuesday he filed an order finding that HUD was wrong and MacKenzie right.

The things that MacKenzie has accused HUD of doing illegally and not doing illegally do not fall, the judge said, beneath the umbrella of discretionary administrative decision-making. More to the point, maybe, the judge found that HUD didn’t even try to prove up the argument that its specific actions were discretionary:

“Although HUD correctly states that this court does not have jurisdiction under the APA to review claims based on agency actions committed by law to agency discretion, HUD does not contend that any of the specific FHA provisions on which MacKenzie relies are discretionary.” 

Lockey and MacKenzie didn’t win a clean sweep in this decision. They are still trying to get the judge to order HUD and other witnesses to answer a raft of questions under oath. Fitzwater demurred, at least for now, saying they haven’t proven their own case for why they need those answers.

But what if they make those proofs and persuade the judge to order “discovery,” as it is called in a lawsuit? That’s when this lawsuit really starts pulling down the walls, no matter who prevails.

The questions MacKenzie has prepared will go out to a list of players including Secretary Castro and Mayor Rawlings, a bevy of past and present city officials, another bevy of people at HUD, perhaps some people in the Justice Department and maybe even some of the longtime community activists involved in segregation issues in Dallas.

Former top HUD official Sara Pratt is sure to be put under oath, if a federal judge lets MacKenzie do discovery. Two weeks after Julian Castro was appointed Secretary of HUD, she got a message to Lockey and MacKenzie's lawyers tipping them that a deal was afoot at HUD behind their backs.
Former top HUD official Sara Pratt is sure to be put under oath, if a federal judge lets MacKenzie do discovery. Two weeks after Julian Castro was appointed Secretary of HUD, she got a message to Lockey and MacKenzie's lawyers tipping them that a deal was afoot at HUD behind their backs.
US Department of Housing and Urban Development

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To very broadly characterize those questions, I think they will seek to discover if there is a pattern, maybe even a culture by which people in government and people in the community are able to frustrate and defeat the civil rights laws of the nation.

Even though federal law, court decisions and administrative procedure all require public officials to affirmatively further desegregation in housing, is there some kind of ongoing inside backroom deal by which that goal is defeated?

If so, is it just politics? If it is, then may the best politician win. But what if we are really talking about a conspiracy to violate the law? That is what Lockey and MacKenzie are alleging, and that is the question that Judge Fitzwater has just green-lighted for a full airing.

And in either case, politics or conspiracy, might not some of this help explain the overwhelming reality we see on the map every day? You know, we look at the reality so often and for so long that we become blind to it.

One of my favorite back-channel anecdotes from this whole saga is about the federal investigator who looked over a bunch of official city of Dallas documents and noticed that they referred to the “southern sector” and the “northern sector.”

I was told that he looked up and said, “You have sectors?”

Well, yeah. Doesn’t everybody? How else would you tell the minority part of town from the white part? It’s not like we have concertina wire. Not much concertina wire, anyway. A little.

There are moving personal stories behind this litigation that I hope to tell one day, on all sides of it. At least on the white side, it’s hard to find any pure white hats. But there are gray hats. I think some people even carry two hats, a white one and a black one, depending on what they have to do that day.

But make no mistake about this lawsuit. Fitzwater, generally considered to be a conservative jurist, is recognized also as a scholarly and cautious judge. I’m sure he ruled on what was before him, but I’m equally sure he knows what lies ahead.

This lawsuit wants to stick its nose under the tent of politics. It wants to get its foot in the door of the backroom deals. It wants to raise questions about who’s the liberal, who’s the conservative, who’s the racist, who’s not. And it wants to ask why things are still the way they are.

No wonder so many units of government have devoted so much time, treasure and effort to throttling these questions in the crib. As of now, the questions are alive.


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