Joliet v. New West, L.P.

In 2005, Joliet proposed to condemn and raze New West's apartments as a public nuisance. By 2017 the district court held that Joliet is entitled to condemn the buildings, set just compensation at $15 million, and held that New West cannot obtain relief against the city under federal housing discrimination statutes. The Seventh Circuit affirmed. The parties then disputed the status of a reserve fund, about $2.8 million, that the Department of Housing and Urban Development (HUD) held for the federally-subsidized apartment complex. New West argued that the money came from rents to which it was entitled by contract with HUD and that, once it no longer had responsibility for the buildings, HUD must write it a check. The district court recognized that the fund was not part of the condemnation or housing-discrimination suits, but nonetheless rejected New West’s claim and concluded that the fund should accompany the buildings. The Seventh Circuit vacated. HUD controls the reserve fund and is the only entity that can use or disburse it; HUD was dismissed as a party in 2013. The court lacked authority to order HUD to do anything. New West needs to file a new action, seeking an order that the federal government pay it a sum of money, in the Court of Federal Claims, under the Tucker Act or in the district court. “In either forum, the judge should start from scratch, disregarding the missteps in the condemnation suit.” View "Joliet v. New West, L.P." on Justia Law