Alliance of Californians for Community Empowerment v. Federal Housing Finance Agency (Eminent Domain)
The ACLU, the ACLU Foundation of Northern California, the ACLU Foundation of New Jersey, and the Center for Popular Democracy filed a lawsuit under the Freedom of Information Act (FOIA) to compel the Federal Housing Finance Agency (FHFA) to provide details about the agency's relationship with the financial industry and its efforts to block municipalities from using eminent domain to prevent foreclosures. The complaint was filed on behalf of a number of community groups across the country.
Banks have foreclosed on millions of homes, and vast numbers of homeowners remain at risk of losing their homes to foreclosure because their mortgages are "underwater," meaning homeowners owe more than their properties are now worth. Communities with large African-American and Latino populations such as Richmond, California, and Irvington, New Jersey, have been particularly hard hit.
Some municipalities, such as Richmond, are responding by exploring eminent domain as a tool that could help homeowners remain in their homes, bolster neighborhoods and maintain property values for all homeowners.
The FHFA has responded by threatening legal action against Richmond or any other city that uses eminent domain to reduce mortgage principals and by threatening to deny credit to people seeking mortgages in those communities.
In October, community groups filed a FOIA request seeking information about the nature and substance of the FHFA's exchanges with the financial industry on this issue. The agency never responded, leading the community groups to file this lawsuit.
Plaintiffs achieved a victory when the court denied the government’s summary judgment motion. The Court held that that the government had not met its burden of justifying withholding information from the documents it located. In addition, the government conceded that it performed an inadequate search for records and has agreed to perform further searches.