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GAUTREAUX v. CHICAGO HOUSING AUTHORITY

June 22, 2004.

DOROTHY GAUTREAUX, et al., Plaintiffs,
v.
THE CHICAGO HOUSING AUTHORITY, et al., Defendants. CONCERNED RESIDENTS OF ALBA ("CRA"), et al., Intervenor-Plaintiffs, v. THE CHICAGO HOUSING AUTHORITY, et al., Intervenor-Defendants.



The opinion of the court was delivered by: MARVIN ASPEN, Chief Judge, District

MEMORANDUM OPINION AND ORDER

Over thirty years ago, a group of Chicago Housing Authority ("CHA") residents filed a federal class action suit in which they alleged that the CHA had unconstitutionally discriminated against them by selecting sites for public housing based on the racial makeup of the surrounding communities. In 1969, United States District Court Judge Austin entered a judgment on the pleadings in favor of the CHA residents, finding that the CHA had engaged in a pattern of racial discrimination in selecting public housing sites. Gautreaux v. Chicago Hous. Auth., 296 F. Supp. 907 (N.D. Ill. 1969). He ordered the parties to "formulate a comprehensive plan to prohibit the future use and to remedy the past effects of CHA's unconstitutional site selection and tenant assignment procedures." Id. at 914. Pursuant to that mandate, as well as this Court's subsequent orders, the class-action plaintiffs (the "Gautreaux plaintiffs"), the CHA, the United States Department of Housing and Urban Development ("HUD"), and a court-appointed receiver have worked together to develop a plan for the revitalization of one of the Chicago's major public housing developments, the ALBA Homes. (We will refer collectively to this group of parties as the "Gautreaux parties" or the "original parties" to this litigation). The Concerned Residents of ALBA ("CRA") object to the proposed joint plan on the grounds that it does not do enough to remedy the past effects of CHA's discriminatory practices. CRA has therefore filed a motion to intervene in the Gautreaux litigation so that it may have a forum in which to voice its objections. For the reasons set forth below, we deny its motion to intervene as untimely.

BACKGROUND

  On June 19, 1998, we approved a joint motion of the Gautreaux parties, entering an order designating an ALBA Revitalization Area and authorizing the development of non-elderly public housing units. Pursuant to our order, CHA submitted an application for funding under the federal government's HOPE VI program, along with a tentative plan for development of the ALBA Revitalization Area. Not long thereafter, on July 29, 1999, the CRA, a group comprised of current, former, and potential ALBA residents, filed suit against the CHA and HUD, challenging the proposed ALBA redevelopment plan, which we dismissed without prejudice as to CRA's right to intervene in the Gautreaux action. Gautreaux v. Chicago Hous. Auth., No. 66 C 1459 (N.D. Ill. Nov. 4, 1999). The ALBA plaintiffs then filed a motion to intervene, which we denied without prejudice. Gautreaux v. Chicago Hous. Auth., No. 66 C 1459 (N.D. Ill. Sept. 25, 2000). At that time, we found that the CHA had only developed a tentative plan for the ALBA Revitalization Area. Because the parties had not yet come up with a final redevelopment plan, we held, the CRA's complaint, which alleged that the plan was illegal, was not ripe for adjudication. Id. We explained that "once a development plan is finalized, we expect to hold a hearing on the merits of the plan, which would involve receiving either oral or written submissions from all interested parties. At that time, if the CRA believes the final plan is in violation of the law, it may renew its motion to intervene." Id. CRA appealed this order to the Seventh Circuit, but voluntarily dismissed its appeal on May 31, 2002 because "the parties reached agreement that the ALBA redevelopment plan had become ripe, meeting the requirements set forth in this Court's Order of September 25, 2000." (CRA's Mem. In Support of Mtn. to Intervene at 3.) CRA did not renew its motion to intervene in the case until two years later, when it filed the present Amended Motion to Intervene on May 14, 2004.

  ANALYSIS

  In its motion, CRA argues first that, pursuant to Federal Rule of Civil Procedure 24(a)(2), it has a right to intervene in the Gautreaux action. CRA's second argument is that, even if this Court finds that CRA is not entitled to intervene as a matter of right, this Court should allow permissive intervention pursuant to Federal Rule of Civil Procedure 24(b). We discuss each argument in turn.

  I. Intervention as of Right

  A party may intervene in an action as of right when, inter alia, "the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties." Fed.R.Civ.Pro. 24(a)(2). Mirroring the language of the Rule, the Seventh Circuit has set forth a four-part test for determining whether a party may intervene as of right: 1) the application must be timely; 2) the applicant must claim an interest relating to the property or transaction which is the subject of the action; 3) the applicant must be so situated that the disposition of the action may impair or impede the applicant's ability to protect that interest; and 4) existing parties must not adequately represent the applicant's interests. Heartwood, Inc. v. United States Forest Serv., Inc., 316 F.3d 694, 700 (7th Cir. 2003) (citing Sokaogon Chippewa Community v. Babbitt, 214 F.3d 941, 945-46 (7th Cir. 2000)). The failure of any one of these factors requires denial of the petition to intervene. Reich v. ABC/York-Estes Corp., 64 F.3d 316, 321 (7th Cir. 1995) (citations omitted).

  Turning to the first requirement, timeliness, the Seventh Circuit has held that courts should evaluate whether an application to intervene is timely according to a reasonableness standard. People Who Care v. Rockford Bd. of Educ., 68 F.3d 172, 175 (7th Cir. 1995) ("[R]equiring potential intervenors to be reasonably diligent in learning of a suit that might affect their rights, and upon learning of such a suit, to act to intervene reasonably promptly."). A party may not intervene if it "dragged its heels" after learning of its interest in a lawsuit. Nissei Sangyo Am., Ltd. v. United States, 31 F.3d 435, 438 (7th Cir. 1994). There are four factors that a court must consider in assessing timeliness: 1) when the intervenor knew or should have known of his interest in the case; 2) whether the delay caused any prejudice to the original parties; 3) whether the intervenor would suffer any prejudice if his motion is denied; and 4) any unusual circumstances. Id. (citations omitted). Taking each of these factors in turn, we conclude that the CRA's application is not timely.

  We first consider when CRA knew or should have known of its interest in the case. There is little question that CRA knew it had an interest in the case from the early stages of the ALBA redevelopment process since it filed its first suit against the CHA and HUD in 1999, shortly after this Court entered the order designating the ALBA Revitalization Area. Once we ordered that intervention was the appropriate vehicle for addressing its concerns (rather than the filing of a separate suit), CRA was also diligent about filing its first motion to intervene. As discussed above, however, we denied that motion on the grounds that CRA's interest in the case was not yet ripe. Gautreaux v. Chicago Hous. Auth., No. 66 C 1459 (N.D. Ill. Sept. 25, 2000). At that time, we indicated that CRA could renew its motion to intervene once its claim did become ripe. Thus, the pertinent issue for purposes of the present motion to intervene is not when CRA knew of its overall interest in the case, but when CRA knew or should have known that its claim became ripe for adjudication.

  CRA concedes in its brief that, as soon as May 2002, "the parties reached agreement that the ALBA redevelopment plan had become ripe, meeting the requirements set forth in this Court's Order of September 25, 2000." (CRA's Mem. In Support of Mtn. to Intervene at 3.) There is therefore little question that CRA knew that the time was ripe for intervention as early as May of 2002. Yet it waited a full two years before renewing its motion to intervene. Although there is no set time limit by which a party must file a motion to intervene once it is aware of its interests, courts have held that much shorter time periods were insufficient. See, e.g., City of Bloomington, Indiana v. Westinghouse Elec. Corp., 824 F.2d 531, 535 (7th Cir. 1987) (finding that an eleven-month delay before seeking intervention was too long). CRA retorts that it had a good reason for holding off on renewing its motion since the parties were engaged in settlement negotiations and intervention might not be necessary. This argument is unpersuasive. CRA knew the case was ripe, and yet it waited two full years to intervene.

  CRA maintains that it also waited two years to renew its motion because it relied on a supposed promise (contained in our Order of September 25, 2000) that we would hold a hearing on the merits of the ALBA redevelopment plan and that the hearing would act as a signal to CRA that its claim had become ripe. However, most significantly, CRA admits that it knew the case became ripe in May of 2002. In light of this admission, CRA's allegation that it has been biding its time, waiting for us to hold a hearing, appears disingenuous. Moreover, CRA has misread our Order of September 25, 2000. In that Order, we said that "once a development plan is finalized, we expect to hold a hearing on the merits of the plan, which would involve receiving either oral or written submissions from all interested parties. At that time, if the CRA believes the final plan is in violation of the law, it may renew its motion to intervene."*fn1 Gautreaux v. Chicago Hous. Auth., No. 66 C 1459 (N.D. Ill. Sept. 25, 2000). In any case, the unmistakable message of the Order was that CRA could renew its motion to intervene once a plan had been finalized, not once a hearing had been held.*fn2 For example, in the concluding sentence of the Order, we explicitly told CRA when a renewed motion would be considered appropriate. We stated that we would "dismiss the complaint without prejudice to the CRA's right to bring another motion to intervene in this court after the completion of the development plan." Id. In short, we spelled out for CRA when the proper time for filing suit would be: once a plan was finalized. CRA acknowledged that the controversy was ripe more than two years ago, but waited until one month ago to renew its motion to intervene. We thus find that CRA has failed to satisfy the first prong of the timeliness analysis.

  Next, we consider whether the Gautreaux parties were prejudiced by CRA's delay. See People Who Care v. Rockford Bd. of Educ., 68 F.3d 172, 176 (7th Cir. 1995) (noting that "the ultimate test in considering timeliness is the prejudice suffered by the parties because of [the intervenor's] delay in petitioning to intervene."). The CHA contends that the CRA's delay is "catastrophic." (CHA's Mem. in Opp. to Mtn. to Intervene at 17.) Although this may be an overstatement, CHA does point out that, after a several-year long process of developing plans, meeting with concerned neighborhood groups, obtaining building permits, and securing funding, construction is finally set to begin on the ALBA development project on July 1, 2004. See City of Bloomington, Indiana v. Westinghouse Elec. Corp., 824 F.2d 531, 535 (7th Cir. 1987) (finding that intervention after the original parties had come to a settlement agreement was prejudicial because it would "render worthless all of the parties' painstaking negotiations" and impede the cleanup of environmental waste). CHA also alleges that the deadline for completion of the project is in late 2005, that they are dealing with an already ambitious construction schedule, and that failure to meet their deadline could cause the CHA to forfeit eligibility for certain tax credits that are essential to the project's funding.

  HUD also describes significant problems that the parties could face if the ALBA plan is delayed. According to HUD, it is required to recapture any funding that it provides to local housing authorities that are not used in a timely fashion. Thus, HUD argues that if CRA's intervention causes substantial delays in the ALBA project, it might have no choice but to withdraw its funding. HUD also points out that funding for the HOPE VI program (under which the parties obtained funding for the ALBA project) has been "dramatically cut" in recent years and worries that the program "may not have a long future." (HUD's Mem. in ...


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