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Stay Pending Appeal Could Prevent Mootness, D.C. Circ. Says

By Tanya Roth, Esq. on April 06, 2012 4:03 PM

Mootness is something every lawyer knows about, theoretically speaking. When obtaining equitable relief, however, the issue of mootness need to be thought of well in advance of appeal, as proper steps need to be taken early in the game.

Here's an example from the D.C. Circuit Court of Appeals, where preemptive thinking could have kept the issue ripe for appeal.

A housing complex for elderly and disabled residents was severely damaged by Hurricane Katrina. The nonprofit that owned the complex, NBC-USA Housing Inc., had received funding from the Department of Housing and Urban Development under the Cranston-Gonzalez National Affordable Housing Act. As a condition of this funding, there were certain arrangements that needed to be made to restore the complex for occupancy. The failure to make these changes triggered a foreclosure clause in the agreement between HUD and NBC-USA. As a result, HUD tried to foreclose. NBC-USA sought an injunction. The injunction was not granted by the district court.

NBC-USA appealed, but they didn't ask for a stay pending appeal in the district court or in the appeals court.

By the time the case got to the D.C. Circuit Court of Appeal, the property had already been sold in foreclosure proceedings.

The Court of Appeals stated that when an "intervening event" makes it impossible for the court to grant relief, the appeal is moot. Under Article III, Section 2 of the Constitution, there is a requirement that a controversy be "actual and ongoing" in order for a court to rule on it.

The court noted that NBC-USA failed to ask for the courts to issue an injunction pending appeal. Nor did NBC-USA make a move in either court for a stay pending appeal. Thus, HUD was free to proceed with the foreclosure proceedings.

The lesson: Arm yourself procedurally if you're planning an appeal.

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