NAACP Legal Defense and Educational Fund Wins Injunction in Post-Katrina Housing Discrimination Case

(PR Newswire) — Today the United States Court of Appeals for the District of Columbiaissued an injunction protecting funds from the Road Home Program so that displaced homeowners can have an opportunity to show that Louisiana and HUD have distributed recovery funds in a discriminatory manner. The Road Home program is an $11 billion federally-funded program established by the Department of Housing and Urban Development (HUD) and the Louisiana Recovery Authority (LRA), now the Office of Community Development, to assist residents affected by Hurricanes Rita and Katrina to rebuild and return to their homes. HUD is responsible for overseeing Louisiana’s use of federal disaster recovery funding and assuring that the funds are used to promote equal housing opportunity.

Last month a lower court ordered Louisiana to stop using a formula based on pre-storm home values to calculate any future awards because it found the formula likely has a discriminatory impact on African-American home owners.  But the same court in an earlier decision held that it could do nothing for homeowners who had already received awards based on the apparently discriminatory pre-storm formula.   Today’s order helps ensure that the funds that have yet to be disbursed will be available to address the discrimination identified by the plaintiffs affecting homeowners who already received awards.

“Today’s ruling keeps open the pathway to justice for thousands of Louisiana homeowners who received grants based upon this discriminatory formula,” said John Payton, LDF President and Director-Counsel.

The State of Louisiana was ordered to temporarily freeze disbursement of surplus funds until the U.S. Court of Appeals for theDistrict of Columbia reaches a decision as to whether the lower court may grant relief to homeowners who previously received grants based upon the pre-storm value of their homes.  This provides the opportunity for all homeowners to receive grants based on a non-discriminatory formula.

The suit was filed in November 2008 in the U.S. District Court for the District of Columbia on behalf of five individual plaintiffs representing a class of more than 20,000 African-American homeowners and two fair housing organizations, the Greater New Orleans Fair Housing Action Center and the National Fair Housing Alliance.  The law firms of Cohen, Milstein Sellers & Toll and WilmerHale are co-counsel.