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Law360, New York (April 8, 2020, 9:17 PM EDT) -- The U.S. Department of Housing and Urban Development told a Manhattan federal court on Wednesday it would delay implementing a new rule under fire by public defenders who say it will cut rental assistance for immigrant families with "devastating, permanent" impact.
Government counsel reported the agency would push a looming May rollout date to at least July 1 but perhaps "a more realistic estimate is in September" during a conference call on a lawsuit by the Legal Aid Society seeking documents to challenge the new rule, which adds verification requirements and excludes so-called "mixed-status families" from receiving housing subsidies.
Presently, "mixed" immigrant families with some eligible family members — U.S. citizens or certain legal immigrants — can qualify for HUD assistance, even if the leaseholder is ineligible.
"Your Honor, my understanding is the proposed rule is not going to go into effect in May 2020," government counsel Kirti Vaidya Reddy said before adding that the next 5,000 pages of documents requested by the public defenders are in the hands of a worker who has fallen ill during the coronavirus pandemic.
"There is a significant burden on the agency at this point," Reddy said. "When I spoke to them a few days ago, this production was in the control of a lead contractor who is experiencing COVID-19 symptoms. So, that is, of course, causing delays."
Moreover, the communications requested between the agency and the White House will require a review for executive privilege, which could further delay the production of materials sought in the Freedom of Information Act lawsuit, Reddy said.
The government is still mulling its options for a motion to dismiss the FOIA action, Reddy said, but the motion would likely involve only a portion of the documents sought.
On Friday, a HUD spokesperson said it was still pushing forward with the rule despite the delay in implementing it, noting that "this litigation is not delaying the rulemaking process. We continue to move this rule along as we review public comments at this time."
Counsel for the Legal Aid Society said he was happy to hear the news.
"We are obviously relieved to hear that the rule will not be implemented in May and that does give the parties some opportunities to work together," Jeffrey L. Kessler of Winston & Strawn LLP said, before warning that he saw no reason why any government motion should delay passing along the documents.
In any event, Kessler said, his clients should get all the documents they're entitled to at least three weeks before the new rule goes into effect, whenever that may be.
According to its March complaint, Legal Aid is seeking the internal agency records about the rule HUD proposed in May 2019, because "this information is subject to disclosure and critical to understanding the impact of [and intent behind] a proposed rule that poses an imminent threat to the integrity of the family unit."
The new rule would impact 108,000 people and break up families by effectively evicting one of the parents, Legal Aid argues.
"Within New York City alone, the proposed rule threatens to render 11,400 individuals, including approximately 5,000 children, homeless," the public defenders said, adding it "disproportionately threatens the housing assistance of people of color, and especially individuals who are Latinx."
Moreover, the rule's verification requirements could also displace poor American citizens who may not have the documents to prove they are U.S. citizens and may be unable to get them in time to keep their housing subsidies, the public defenders claim. They say 12% of Americans who make less than $12,000 a year lack proof of citizenship.
Legal Aid seeks a court order demanding HUD hand over the documents within 30 days, waive any FOIA fees, and award attorney fees to the pro bono organization.
Legal Aid is represented by Jeffrey L. Kessler, Jeffrey J. Amato, Kerry Donovan and Jay Wexler of Winston & Strawn LLP.
The government is represented by Kirti Vaidya Reddy of the U.S. Attorney's Office for the Southern District of New York.
The case is The Legal Aid Society v. U.S. Department of Housing and Urban Development, case number 1:20-cv-02283, in the U.S. District Court for the Southern District of New York.
--Editing by Janice Carter Brown.
Update: This article has been updated to add comment from HUD.
For a reprint of this article, please contact reprints@law360.com.
