District Court Strikes Down Texas Ordinance That Restricts Housing Based on Immigration Status

District Court Strikes Down Texas Ordinance That Restricts Housing Based on Immigration Status By: Karen A. Herrling I am writing to share with you a recent federal district court decision where the court struck down a local ordinance that restricted housing based on an individual s immigration status. Villas at Parkside Partners d/b/a Villas at Parkside, et al., v. The City of Farmers Branch, Texas, 2010 WL 1141398 (N.D.Tex.). The decision by United States District Judge Jayne Boyle from the Northern District of Texas, Dallas Division, prohibits the City of Farmers Branch, Texas from enforcing the ordinance. Below is a summary of the decision as well as a litigation time line beginning in 2006 that led up to this current case and decision. Background & Overview The case involves the latest in a series of anti-immigrant ordinances enacted by the City of Farmers Branch, Texas. The ordinance at issue in this case -- Ordinance 2952 is the third enactment by the City of Farmers Branch [hereinafter the City] that involves rental property and unauthorized immigration. Summary of Ordinance 2952 as Detailed by the District Court Ordinance 2952 required that each occupant (18 years and older) of a rental unit in Farmers Branch obtain a residential occupancy license. This residential occupancy license is specific both to the occupant and the unit. Requirement for a Residential Occupancy License: To obtain a residential occupancy license, a person must pay a $5 fee to the City and submit an application. The application requests information, such as, name, address, date of the lease, birth date, as well as the occupant s county of citizenship. Additionally, applicants that are US citizens or nationals must submit a signed declaration under penalty of perjury. Applicants that are not US citizens or nationals must provide an identification number assigned by the federal government that the occupant believes will establish his/her lawful presence in the US or the applicant must declare that he/she does not know of any such number. License and Verification: After the application is completed and the fee has been paid, the City building inspector must issue a residential occupancy license to every prospective occupant. For those individuals that declare that they are US citizens or nationals, the building inspector does nothing further. For those who are not US citizens or nationals, the building inspector must verify with the federal government whether the occupant is an alien lawfully present in the US. The City claims that it is entitled to verification pursuant to 8 U.S.C. Section 1373(c). (This section of the US Code states that [t]he Immigration and Naturalization Service shall respond to an inquiry by a Federal, State, or local government agency, seeking to verify or ascertain the 1

citizenship or immigration status of any individual within the jurisdiction of the agency for any purpose authorized by law, by providing the requested verification or status information. ) Enforcement: The City s enforcement depends upon the response from the federal government that the occupant is an alien not lawfully present in the US. If the federal government reports that the occupant is not lawfully present, the building inspector is directed to send the occupant a deficiency notice informing the occupant of the government s report and giving him/her 60 days to update information with the City and/or the federal government. After 60 days, the building inspector must reverify the citizenship and immigration status of the occupant with the federal government. If the federal government reports that the occupant is not lawfully present in the US, the building inspector must send a revocation notice to both the occupant and lessor. After 15 days of this notice, the individual s residential occupancy license is revoked. Upon revocation, the landlord is required to pursue steps to terminate the lease or tenancy. Suspension of the Landlord s Rental License: If a landlord allows an occupant to live in the rental property without a valid residential occupancy license, his/her rental license will be suspended by the building inspector. During the suspension of a landlord s license, he/she cannot collect any rent, payment, fee, or any other form of compensation from or on behalf of any occupant or tenant in the single family residence. The suspension can be appealed to the City Council. Judicial Review: The Ordinance provides procedures by which a landlord or occupant can challenge a deficiency notice or a revocation notice. A landlord or tenant may seek review by filing suit against the building inspector in a court of competent jurisdiction in Dallas County, Texas. The lawsuit can challenge both the building inspector s compliance with the Ordinance and the federal government s determination of whether the occupant is lawfully present. Procedural History of the Case Two groups of plaintiffs the tenants and the landlords of rental property in Farmers Branch-- brought a pre-enforcement constitutional challenge to Ordinance 2952. The US District Court for the Northern District of Texas Dallas Division, granted plaintiffs application for a temporary restraining order on September 12, 2008 and a preliminary injunction on September 22, 2008. Both parties sought summary judgment in the case. On June 4, 2009, the Court held a hearing on the pending motions for summary judgment. The Court ruled on the summary judgment motions on March 24, 2010. Summary Judgment Arguments by the Parties The plaintiffs sought summary judgment and a permanent injunction on the enforcement of Ordinance 2952. They argued that the Ordinance is preempted by federal law and that it violates plaintiffs due process and equal protection rights under the 14 th Amendment. Defendant s sought summary judgment on the ground that the Ordinance is a valid exercise of municipal authority and that plaintiffs cannot establish standing to assert their constitutional challenges. The Court s Reasoning and Decision 2

Issue of Standing: The Court first addressed the issue of standing. Standing is a requirement that all plaintiffs in any lawsuit must meet to show that they have a personal stake in the outcome of the controversy to warrant the invocation of federal-court jurisdiction. In this case, plaintiffs had to show that they had suffered an injury, that there is a connection between the injury and the conduct complained of, and that it is likely that the injury will be redressed by a favorable decision of the court. Among other things, the Court found that the tenant plaintiffs satisfied their burden and established standing to assert their preemption and other claims. Additionally, the Court found that the landlord plaintiffs provided evidence of harm sufficient to establish their standing to assert their preemption claims and their claims based upon the alleged vagueness of the Ordinance. However, the Court found that the landlord plaintiffs did not establish eligibility to assert the equal protection or other challenges that depend on injury to third parties because the landlord plaintiffs did not provide evidence of a genuine obstacle to such parties asserting their own rights. The Issue of Preemption/Supremacy Clause: Next the Court turned its attention to the issue of preemption. Below is a quick summary of the preemption doctrine as set forth by the Court. The Supremacy Clause provides that the laws of the United States shall be the supreme law of the land[,]... anything in the Constitution or laws of any State to the contrary notwithstanding. U.S. Const. art. VI, cl. 2. Pursuant to this provision, it has long been recognized the federal law preempts contrary state laws. Preemption can be either express or implied. State laws are expressly preempted when they fall within the scope of a federal provision explicitly precluding state action. Alternatively, state laws may be impliedly preempted either as a result of conflict or field preemption. The governing standard for application of the federal preemption doctrine in cases implicating immigration is set forth in De Canas v. Bica, 424 U.S. 351 (1976). The first test is whether the state statute is a regulation of immigration. As the Court pointed out, the power to regulate immigration is a federal power. Thus, any state statute which regulates immigration is constitutionally proscribed. The second test is whether the state law may still be preempted if there is a showing that Congress intended to occupy the field which the statute attempts to regulate. The third test is whether the regulation conflicts with federal law making it difficult to comply with both state and federal law. Parties Arguments on Express Preemption: Plaintiffs asserted that the Ordinance creates classifications and procedures that are inconsistent with federal law, and that it is an impermissible regulation of immigration and is preempted under the doctrines of field and 3

conflict preemption. The City maintained that the Ordinance is not preempted because it merely adopts federal standards and that a presumption against preemption protects the Ordinance. Decision by the Court on Preemption: The Court quickly dismissed the City s argument about a presumption against preemption. The Court explained that [a]presumption against preemption applies where Congress attempts to regulate in a field which the States have traditionally occupied. The Court pointed out that this is a case where the local measure regulates in an area where there has been a history of significant federal power. Thus, the Court found that the presumption against preemption does not apply. The Court proceeded to apply the three part test outlined in De Canas v. Bica, 424 U.S. 351 (1976) to determine whether the Ordinance is preempted by federal law. Express Preemption -- Regulation of Immigration: The City argued that the Ordinance is not a regulation of immigration. The arguments set forth by the City included: (1) the Ordinance adopts federal standards to resolve whether an individual is lawfully present or not lawfully present; (2) the City s decision to issue deficiency notices or penalties under the Ordinance depends upon immigration information received from the federal government; (3) the Ordinance does not create or modify any classification for aliens, but rather relies on existing categories created by the federal government; (4) the Ordinance merely denies rental housing to those unlawfully present in the U.S. and this has only an indirect impact on immigration and imposes a minor inconvenience; and, (5) the Ordinance is a licensing scheme that confers a local benefit, similar to a driver s license. The plaintiffs countered that that the Ordinance is a regulation of immigration. The arguments set forth by the plaintiffs included: (1) the Ordinance creates its own classification of aliens not eligible for rental housing; (2) the Ordinance s standards do not correspond to an established federal immigration status, and instead bypass the complex system of federal classification and discretion governing removal; (3) the Ordinance imposes an additional condition not found in federal law upon those who wish to remain in Framers Branch; (4) the Ordinance does not regulate any recognized public benefit and instead denies entrance and abode to those whose lawful presence cannot be confirmed; and, (5) the Ordinance allows the City to use a query response from the federal government as a substitute for formal removal proceedings to remove certain aliens from Farmers Branch. The Court s Decision on Express Preemption: The Court concluded that the Ordinance is preempted. The Court opined that the Ordinance constitutes an invalid regulation of immigration because it uses federal immigration classifications for purposes not authorized or contemplated by federal law. The Court reasoned that while the Ordinance s requirements do not solely apply to aliens or certain classes of aliens, they impose additional local restrictions based on federal immigration classification on those who wish to remain in Farmers Branch. The Court pointed out that local regulation that conditions the ability to enter into a housing contract on federal immigration status is fundamentally different than the sorts of restrictions on employment or public benefits that have been found not to be preempted. The Court stated that the City may not 4

add to or take away from the conditions imposed by Congress upon admission, naturalization and residence of aliens. It reiterated that the City many not impose an additional burden upon the entrance or residence of aliens that was not contemplated by Congress. Additionally, the Court made clear that a local regulation is not saved simply because it adopts a federal standard. The Court pointed out that the City had not shown or provided any authority for application of an immigration status report provided pursuant to 8 U.S.C. Section 1373(c ) may be applied in the context of licensing access to rental housing in a municipality. The Court pointed out that the City s actions on residential occupancy licenses depended on responses given by the federal government based on immigration classifications adopted for other purposes. By depending on determinations made under an inapplicable federal standard, the Ordinance, according to the Court, constituted an improper regulation of immigration. Also, the Court dismissed the City s attempt to characterize a residential occupancy license as a public benefit that requires proof of eligibility. Moreover, the Court found the City s analogy to driver s licenses inapposite. The Court pointed out that a number of states condition issuance of certain driver s licenses upon receiving verification through government databases and that this practice is expressly authorized by the REAL ID Act and federal regulations. The Court noted that no federal statutes or any other enabling legislation establishes an analogous program that relates to the private market for rental housing. The Court s Opinion on Implied Preemption: While the Court found that the Ordinance is preempted as a regulation of immigration, the Court also considered the parties remaining arguments with respect to implied preemption. The plaintiffs argued that the Ordinance conflicts with fields fully occupied by federal law, including the removal of aliens, provisions of benefits, and establishment of penalties for harboring. In contrast, the City argued that the federal law in each of the categories allows for local regulation or concurrent enforcement in accordance with federal standards. The Court concluded that the Ordinance is preempted by the Immigration and Nationality Act, which provides the exclusive means for removing aliens or adjudicating their status for that purpose. The Court explained that while the Ordinance does not purport to remove aliens from the United States, it regulates local residence based on federal classifications in a manner that directly affects the uniform enforcement of immigration laws. The Court noted that the Ordinance is not acceptable just because it is intended to and may have the effect of discouraging activity prohibited by the immigration law such as the anti-harboring provisions. The Court pointed out that the City is not aiding in the enforcement of federal immigration law based on federal standards through the means set forth by federal law, but instead is attempting to enforce its own scheme that incorporates federal standards for a purpose not contemplated by Congress. The Court noted that the City may take appropriate action to enforce the nation s immigration laws, but it may not independently enforce its own immigration rules. 5

Conclusion of the Court: The Court concluded as a matter of law that the Ordinance is preempted both as a regulation of immigration and under the doctrine of implied preemption. The Court granted the plaintiffs motion for summary judgment on the grounds that the Ordinance is invalid pursuant to the Supremacy Clause. Additionally, the Court granted the plaintiffs request for a permanent injunction of Ordinance 2952. The Court stated that it will not evaluate the remaining due process, equal protection or statutory claims. Appeal: On Tuesday, April 21, 2010, the Farmers Branch City Council voted unanimously to appeal the Court s decision to the 5 th U.S. Circuit Court of Appeals. This appeal will add to the enormous litigation costs of this case and earlier cases. According to outside counsel, an appeal could cost $100,000 to $150,000. This amount is in addition to the legal costs that have already been expended. The Dallas Morning News reported that the legal sum by the end of the fiscal year could exceed $5 million since September 2006 when the first ordinance was enacted. Lessons Learned from Farmers Branch There are lessons that can be gleaned from this case. First, local laws that restrict access to housing based on immigration status have very little success of surviving preemption challenges. This latest decision is one of many unsuccessful attempts to regulate immigration through housing. Similar ordinances in New Jersey, Pennsylvania, California, Missouri, and Texas have been invalidated or repealed. Second, this decision shows the overwhelming need for comprehensive immigration reform. Both parties have incurred tremendous legal expenses to either bring or defend this action. Additionally, the U.S. District Court has expended valuable resources to hear and decide this case. These costs are unnecessary. The Administration and Congress need to work in a bipartisan manner to enact comprehensive immigration reform that, among other things, definitively states that the local laws that regulate immigration are unlawful. Third, courts will find federal preemption if a local enactment directly impacts immigration or impermissibly classifies aliens. Additionally, a local ordinance will not be adjudicated as lawful just because the ordinance adopts federal standards. Similarly, a local ordinance will not pass constitutional muster just because the locality describes the ordinance as a licensing scheme that confers a public benefit. Farmers Branch City Litigation Timeline Resolution 2006-099 September 5, 2006: Resolution 2006-099 passed the City Council. The resolution expressed concern and frustration with the US government s failure to enforce immigration laws, encouraged the government to enforce immigration laws, and noted that it was reviewing the role it could take to enforce immigration law. 6

Ordinance 2892 November 13, 2006: The City Council enacted Ordinance 2892 that directed that the owner and/or property manager to require evidence of citizenship or eligible immigration status for each tenant family in order to rent to them. The ordinance incorporated the classification system set forth in HUD regulations that govern eligibility of non-citizens for housing assistance. The ordinance required applicants to submit a citizenship or immigration status certification. January 9, 2007: The implementation of Ordinance 2892 was enjoined in state court because of concerns related to the Texas Open Meetings Act. January 22, 2007: The City Council repealed Ordinance 2892. Resolution 2006-130 November 13, 2006: This resolution declared English to be the official language of the City of Farmers Branch. Ordinance 2903 January 22, 2007: This ordinance repealed Ordinance 2892 but proposed similar requirements for residential rentals in the City of Farmers Branch. It called for an election to allow the voters of Farmers Branch to vote for or against the measure. May 12, 2007: Farmers Branch voters approved the ordinance by a margin of 4,058 for and 1,941 against. The ordinance was supposed to go into effect on May 22, 2007 Prior to May 22, 2207: A group of plaintiffs challenged the constitutionality of the ordinance. May 21, 2007: United States District Judge Lindsay of the Northern District of Texas, Dallas Division, temporarily enjoined the enforcement of the ordinance. May 28, 2008: Judge Lindsay permanently enjoined the enforcement of the ordinance finding that it was a regulation of immigration invalidated by the Supremacy Clause and that it violated the Due Process cause of the 14 th Amendment because it was void for vagueness. January 22, 2008: The City adopted a new ordinance Ordinance 2952 -- in an attempt to address the concerns raised over the previous one. This ordinance is the subject of the lawsuit that gave rise to the decision by Judge Jayne Boyle of the United States District Court for the Northern District of Texas Dallas Division. This document was created in May 2010 by Karen Herrling. If you have any questions please contact CLINIC s State & Local Advocacy Attorney Karen Siciliano Lucas at (202) 635-7410 or klucas@cliniclegal.org. 7