that provides significantly greater coverage than had been provided to plaintiff class members by the Secretary's regulation. In the court's view, the provision for emergency medical care indicates that not only did Congress fail to ratify the Secretary's prior position but, to a large decree, it repudiated the regulation. The court thus denied the Secretary's motion to vacate the court's earlier decision with respect to the availability to plaintiffs of retroactive relief for actions taken by the Secretary prior to January 1, 1987.

Regulation Requiring Parents' Income to Be Factor in Minor Pregnant Daughter's Medicaid Application Challenged

42,531. Woe v. Perales, No. CIV 87-646 T (W.D.N.Y. filed June 12, 1987). Plaintiffs represented by Rene Reixach, Greater Upstate Law Project, 87 Clinton Ave. N., Rochester, NY 14604-1478, (716) 454-6500; David Ralph, Martha Roberts. [Here reported: (Accession No. 1010054) 42,531A Complaint (9pp.).]

Plaintiff mother has filed a complaint on behalf of her pregnant minor daughter challenging defendant New York Department of Social Services' (DSS's) Medicaid program regulation that denies Medicaid coverage to meet the prenatal care needs of pregnant minors for their unborn children. Plaintiff initiated this action after her 16-year-old pregnant daughter applied for Medicaid benefits and was denied coverage because of plaintiff's income. Plaintiff notes that, prior to December 1986, the DSS regulation provided full Medicaid coverage for the interrelated needs of pregnant minors and their unborn children from the date of medically verifiable pregnancy without counting the income or resources of the parents of the pregnant minor, since parents were not legally responsible for their grandchild. But, in December 1986, that regulation was changed to provide that eligibility for such pregnant minors is determined based on the eligibility of the pregnant minor, and thus her parents' finances must be considered in determining Medicaid eligibility for the prenatal care for her and her unborn child. Plaintiff argues that this results in the denial of prenatal health care essential to the well-being of young mothers and their children, and increases the number of children born who risk death or disability as a result of a low birth weight or other birth defects that could have been prevented had Medicaid been available. Plaintiff claims that DDS is violating the Social Security Act and the equal protection clause of the fourteenth amendment, and she seeks appropriate final injunctive relief and corresponding declaratory relief. Plaintiff also seeks class certification on behalf of all pregnant minors who are receiving or applying for Medicaid benefits.

Physical Therapy Treatments Reasonable and Necessary for Stroke Patient

42,248. Forbes v. Bowen, No. CIV-2-86-339 (E.D. Tenn. June 10, 1987). Plaintiff represented by Clifton Barnes, Legal Services of Upper East Tennessee, 311 W. Walnut St., Johnson City, TN 37604, (615) 928-8311; Brian Paddock. [Here reported:

(Accession No. 1010023) 42,248D Report & Recommendation (6pp.); 42,248E Order (2pp.). Previously reported at 21 CLEARINGHOUSE REV. 46 (May 1987).]

The court has adopted the magistrate's recommendation and awarded Medicare benefits to plaintiff, an 85-year-old stroke victim whose outpatient physical therapy treatments and other home health services were terminated when the ALJ determined that these treatments were not reasonable and necessary. At the hearing before the ALJ, the Secretary argued that, while plaintiff would continue to improve with the treatments, it was not enough improvement to warrant further service. Plaintiff's doctor and physical therapist both testified that, while plaintiff was taking physical therapy, he was able to walk 40 to 50 feet; however, since the treatments stopped, he has regressed and can no longer walk. After hearing the evidence, the ALJ concluded that physical therapy would not significantly improve plaintiff's condition. On judicial review, the court approved the magistrate's recommendation and found that (1) the evidence that the defendant relied upon came from a paid claims consultant who had never seen or examined plaintiff; (2) the testimony of defendant's consultant regarding plaintiff's inability to improve significantly, if at all, failed to show by substantial evidence that the therapy was not reasonable and necessary; and (3) the magistrate's conclusion that the therapy needs to be provided by a skilled therapist was correct. The case was remanded for an award of benefits.

Nursing Home Drops Collection Action in Return for Dismissal of Patient's Counterclaim for HillBurton Violation

42,538. Peabody Memorial Nursing Home, Inc. v. Palmour, No. 86-C-16 (Kan. Dist. Ct., Marion County, Dec. 30, 1986). Defendant represented by Joel Hayes, Flint Hills Legal Services for Senior Citizens, 102-B S. Fourth St., Manhattan, KS 66502, (913) 537-2943. [Here reported: (Accession No. 1010065) 42,538A Amended Answer (5pp.); 42,538B Plf's Request for Admissions (9pp.); 42,538C Journal Entry of Dismissal (1p.).]

A settlement has been reached in this case in which plaintiff nursing home sought $9,876 in collection from defendant patient, who asserted a Hill-Burton collection defense. Defendant alleged that the nursing violated its statutory and regulatory obligations under the Hill-Burton Act by failing to provide a reasonable volume of medical care below cost or without charge, failing to provide notice to eligible patients of their entitlement to free or below-cost care, and failing to refrain from making collection efforts or instituting suits against eligible persons unable to pay for medical services. Defendant also alleged that she personally submitted a written request for free care that was refused by plaintiff, in violation of its Hill-Burton contractual obligations. Defendant contended that had she known of, applied for, and received Hill-Burton free care, she would not have had reason to pay plaintiff $5,858 for medical care, and she counterclaimed for that amount plus interest. Under the terms of the settlement, the nursing home agreed to drop its collection action in return for dismissal of defendant's counterclaim.

The Federal Role in Protecting Babies Doe

The National Legal Center for the Medically Dependent and Disabled has published an article entitled "The Federal Role in Protecting Babies Doe" in the March 1987 issue of Issues in Law & Medicine. This article, written by Martin H. Gerry and Mary Nimz, explores the range of federal statutory provisions that are available to protect the lives of disabled infants with life-threatening conditions from the decision to intentionally withhold medically indicated treatment. Specifically, the protections provided by the Child Abuse Amendments of 1984 and by section 504 of the Rehabilitation Act of 1973 are discussed. The authors also review the development of the wording of the Child Abuse Amendments in light of recent claims that the amendments provide substantially less protection than would appear to be provided on the face of the text of the amendments. In addition, the remaining protections available under section 504 are examined in light of the United States Supreme Court's decision in Bowen v. American Hospital Association, 106 S. Ct. 2101 (1986).

Issues in Law & Medicine, volume 2, number 5 (Mar. 1987), is available for $4.50 from Office of Publications, P.O. Box 1586, Terre Haute, IN 47808-1586.

Disability Claimant Will Receive Categorically Needy Medical Assistance While Awaiting Determination of Disability

41,815. Hartman v. Pennsylvania, No. 3464 (Pa. Commw. Ct. filed Mar. 25, 1987). Petitioner represented by David Axinn, Blair County Legal Services, 1107 Twelfth St., Altoona, PA 16601, (814) 943-8139. [Here reported: (Accession No. 1010025) 41,815C Petitioner's Brief (28pp.). Previously reported at 20 CLEARINghouse Rev. 1321 (Feb. 1987).]

The Pennsylvania Department of Public Welfare has agreed to continue categorically needy medical assistance (MA) for petitioner in this action in which she sought judicial review of the denial of her request for MA. Petitioner had applied for SSI based on a disability. She was initially denied and appealed the decision. Petitioner's income placed her above the level for GA or AFDC, but below the level for an SSI grant. The county assistance office initially found petitioner eligible for categorically needy MA based on her disability, but subsequently found that she was not eligible under a new interpretation of the regulations that persons found ineligible for SSI do not qualify for MA benefits. Petitioner alleged that the income regulations for MA indicate that either the family allowance for AFDC/GA or the SSI payment level may be applied and that no indication is given as to the method used to determine which level will be applied. She also contended that the spend down procedures state that the SSI level should be used for disabled persons. Petitioner further asserted that there is no requirement that an individual be a recipient of SSI for the spend down procedures to be applied and that the intention of the regulations is that

those persons who are disabled will be eligible for MA as long as their income after applying the spend down rules does not exceed the SSI level. The federal regulations regarding categorically needy MA clearly state that the agency must make a determination considering disability and give petitioner the right to have her disability claim determined in connection with her MA application, without waiting for the results of her SSI determination. Counsel notes that, after petitioner filed her brief, the Department indicated that it would be willing to settle the case favorably to petitioner. It has agreed to refer petitioner for an independent determination by the Department as to her disability, which is the basis for eligibility for MA, and it has issued temporary regulations providing a procedure for determinations of disability in categorically needy, non-money payment

cases.

Decision to Conditionally Approve Ambulatory Surgery Center on Physician Participation in Medicaid Program Upheld

42,195. Cape Cod Hosp. v. Department of Pub. Health, Project No. 5-3384 (Mass. Health Facilities Appeals Bd. June 11, 1987). Taxpayer Group represented by Richard McIntosh, Legal Services for Cape Cod and Islands, 460 W. Main St., Hyannis, MA 02601, (617) 775-7020. [Here reported: (Accession No. 1010073) 42,195B Claim of Appeal (6pp.); 42,195C DPH's Brief in Opp'n to Claim of Appeal (38pp.); 42,195D Appellant's Brief (33pp.); 42,195E Taxpayer Group's Brief (70pp.); 42,195F DPW's Amicus Brief in Support of DPH (6pp.); 42,195G Legal Services Letter to Administrator in Response to Decision (5pp.); 42,195H Decision (10pp.).]

The Health Facilities Appeals Board has denied the appeal of a hospital, which challenged the imposition of a condition of physician participation in the Medicaid program on the grant of permission to build an ambulatory case/ambulatory surgery center. The hospital applied to the Department of Public Health for permission, in the form of a determination of need (DON), to build the center. The Public Health Council granted the DON, but only on condition that 85 percent of the physicians in each specialty using the center enroll and participate in Medicaid. The condition was based on a finding that the failure of some specialist physicians to participate in Medicaid has caused a history of Medicaid access problems at the hospital. The condition was therefore imposed to ensure adequate Medicaid access at the proposed facility. The hospital appealed the Council's decision to the Health Facilities Appeals Board, arguing that conditioning approval on physician participation in Medicaid violates state and federal law and that it was unreasonable and an abuse of the Council's discretion to impose this condition on the center's construction. Furthermore, the hospital argued that there is insufficient basis in the record to permit the Council to determine that patients in the hospital's service area have inadequate access to services and that, in the absence of such a determination, the Council is without power to require the hospital to satisfy an unspecified standard. Finally, the hospital alleged that, even if inadequate access can be established, the Council may not lawfully remedy the problem by requiring the hospital to guarantee a minimum rate of physician participation in Medicaid. The Appeals Board upheld the Council's decision, ruling inter alia that (1) the Department has full

power to ensure Medicaid access by imposing a condition that would have the practical effect of forcing doctors to participate in Medicaid against their will; (2) the hospital had the power to implement the condition by conditioning doctors' privileges at the new facility on their participation in Medicaid; and (3) the conditioning of the DON does not violate the Medicare, Medicaid, or anti-trust statutes or the doctors' constitutional rights.

ALJ Reverses Denial of Medicare Home Health Benefits for Maintenance of Physical Therapy

42,484. L., Mildred, In re, (SSA, Office of Hearings & App., Oct. 3, 1986). Claimant represented by Jan Stiefel, Massachusetts Medicare Advocacy Project, Greater Boston Elderly Legal Services, 102 Norway St., Boston, MA 02115, (617) 536-0400. [Here reported: (Accession No. 1010005) 42,484A Memo in Support of Claim for Health Insurance Benefit (9pp.); 42,484B Decision (6pp.).]

The ALJ reversed the decision of the fiscal intermediary, Blue Cross of Massachusetts, and held that physical therapy services provided to claimant in her home were reasonable and necessary for the treatment of her medical condition and should therefore be covered by Medicare. Claimant, a 67-year-old woman, suffers from cervical osteoarthritis and compression of the spinal cord. Although her physician prescribed physical therapy treatments in her home, Blue Cross only allowed Medicare coverage for one year of services. All subsequent coverage was disallowed by both Blue Cross and the provider, because claimant was deemed to be "at maintenance level." While still receiving therapy services, claimant twice petitioned Blue Cross to reconsider its decision; the first request for reconsideration went unacknowledged and the second was acknowledged but denied. Claimant requested a hearing, and the ALJ found that, based on the testimony of two of claimant's personal physicians and one physician who reviewed her past medical history, claimant's home physical therapy sessions were medically reasonable and necessary. The ALJ further held that claimant is not required to show a likelihood of significant improvement in order to be eligible for continued services. In so ruling, the ALJ applied the regulations governing Medicare coverage of physical therapy in skilled nursing facilities, including the provision that "a patient may need skilled services to prevent further deterioration," and concluded that claimant was eligible for Medicare Part A Home Health benefits under Title XVIII.

HOUSING

FmHA Decision Rejecting Applicants for Rural Housing Loan on Creditworthiness Grounds Not Subject to Judicial Review

41,612. Woodsmall v. Lyng, No. 86-1680 (8th Cir. filed Apr. 28, 1987). Appellants represented by Janice Rutledge, Christine Luzzie, Legal Services Corp. of Iowa, 430 Iowa Ave., Iowa City, IA 52240, (319) 351-6570. [Here reported: (Accession

No. 1010046) 41,612H Opinion (13pp.); 41,612-I Appellants' Petition for Rehearing En Banc (20pp.).]

The Eighth Circuit has affirmed the district court's dismissal of appellants' action seeking judicial review of FmHA's denial of their rural housing loan application. Appellants originally applied for a section 502 rural housing loan, but were denied by FmHA. Appellants were informed by FmHA that their application was denied because of certain credit information. Subsequent informal negotiations between FmHA and appellants were unsuccessful, and appellants pursued an administrative appeal. After a hearing, FmHA determined that the denial of appellants' application was proper. This decision was upheld on appeal to the state director. Appellants then filed this action for judicial review, alleging that FmHA's decision was not supported by substantial evidence and that FmHA had unlawfully failed to promulgate adequate standards or guidelines for evaluating creditworthiness. The district court dismissed, determining that the decision was not subject to judicial review or, if it was, it was supported by substantial evidence. The Eighth Circuit has affirmed, concluding that FmHA's evaluation of appellants' creditworthiness and the subsequent denial of appellants' application is not judicially reviewable. The court reasoned that FmHA's action is committed to agency discretion by law. However, the court did review appellants' claim that FmHA failed to promulgate adequate written standards for evaluating creditworthiness, but found that neither the due process clause nor the rural housing loan program statute require further standards. The court held that the lack of further written standards or guidelines does not violate appellants' due process rights. Appellants have filed a petition for rehearing en banc, arguing that the decision is in conflict with other Eighth Circuit decisions.

USDA Secretary Cannot Authorize Sale of "Unsuitable" FmHA Homes Without Publishing the Rule for Notice and Comment

42,432. Arteaga v. Lyng, No. 86-939-Civ-T-15(C) (M.D. Fla. Mar. 26, 1987). Plaintiffs represented by Nora Leto, Robert Connolly, Florida Rural Legal Services, 305 N. Jackson Ave., Bartow, FL 33830, (813) 534-1781. [Here reported: (Accession No. 1010031) 42,432A Complaint (12pp.); 42,432B Consolidated Motion for TRO & Prelim. Inj. (4pp.); 42,432C Memo in Support of Plfs' Consolidated Motion (20pp.); 42,432D Order (14pp.).]

The court has enjoined the Secretary of the USDA from again promulgating a final rule authorizing the sale of unsuitable Farmers Home Administration (FmHA) single-family home property without first publishing the proposed rule for notice and comment, or certifying the rule as exempt because it is issued on an emergency basis. In May 1986, FmHA amended its regulation providing for the disposal of unsuitable property to allow a 90-day sale of up to 16,000 single-family houses in inventory through brokers to investors at favorable terms (the "summer sale"). These inventory houses were originally built under FmHA's section 502 program as homes for low- and moderate-income families. Named plaintiff filed an action in federal court seeking to enjoin FmHA's summer sale, alleging that the summer sale rule was promulgated without notice and

opportunity for the public to comment, as required by section 553(d) of the APA and by section 1490 of the Farm Housing Act. In partially granting plaintiff's motion for summary judgment, the court first addressed the issue of mootness, noting that the summer sale by its own terms ended on August 29, 1986. However, the court found that the mootness doctrine does not apply because of the likelihood of recurrence of such sales, which would always run their course before an adequate challenge could be heard. The court did dismiss as moot the complaint of the original named plaintiff, as he has since found satisfactory housing through the section 502 program, and intervenors were substituted as named plaintiffs. Further, the court found that, even though they cannot show a substantive injury, plaintiffs have standing based on the alleged denial of a federally created procedural right. The court noted that plaintiffs have an interest in commenting on regulations controlling the availability of housing that is within the zone protected by the Farm Housing Act that is sufficient to support their standing. On the merits, the court found that the summer sale regulation is exempt from the publication requirements of the APA, but that it fails to satisfy the publication requirements of the Act. Thus the court enjoined the Secretary from again promulgating a summer sale rule without first publishing the proposed rule for notice and comment or certifying the rule as exempt.

HUD's Motion to Dismiss Two Suits Seeking to Enjoin Proposed Sale of Housing Complexes Denied

42,503. Minneapolis Community Dev. Agency v. HUD, No. 3-86-1046 (D. Minn. May 15, 1987). Plaintiff represented by William Messinger, 1050 Title Insurance Bldg., 400 Second Ave. S., Minneapolis, MN 55401, (612) 338-1932. [Here reported: (Accession No. 1010012) 42,503A Order (5pp.).] 42,504. Riverside Plaza Tenants Ass'n v. HUD, No. 3-87-65 (D. Minn. May 15, 1987). Plaintiffs represented by same as above. [Here reported: (Accession No. 1010013) 42,504A Order (5pp.).]

The court has denied HUD's motion to dismiss these two consolidated suits in which the local housing authority, the tenants' association, and the local neighborhood group seek to enjoin HUD's plan to sell two HUD foreclosed housing complexes to the highest bidder. Plaintiffs also seek an order that HUD reevaluate its disposition plans for the projects in conformance with governing law, and they request an order that HUD sell the projects to the Minneapolis Community Development Authority by negotiated sale. Plaintiffs maintained that HUD has failed to give adequate consideration to factors that it is required to weigh under the governing statute and regulations for making disposition determinations. HUD, on the other hand, argued that the court's review was limited to the existing administrative record, which, viewed in isolation, indicates that HUD did adequately consider each factor before it decided to dispose of the projects by competitive bidding. Stating that summary judgment was inappropriate in these cases, the court found that "HUD cannot rely on a skeletal administrative record to rebut allegations that the officials who prepared the administrative record did so hastily and without adequate consideration of statutorily mandated factors, particularly where, as here, plain

tiffs have provided affidavits supporting such allegations." The court also rejected HUD's arguments for dismissal, finding that (1) sovereign immunity for the Secretary is unequivocally waived by 12 U.S.C. § 1701 and that this waiver need not be affirmatively pled; (2) HUD's decision regarding disposition of the projects is reviewable under the Administrative Procedure Act, 5 U.S.C. §§ 701(a) and 702; and (3) the "agency discretion" exception in these cases is circumscribed by HUD's policy goals set out in 12 U.S.C. §§ 1701z-11. The court did, however, dismiss plaintiffs' request for an order compelling HUD to sell to the local agency, stating that, pursuant to 5 U.S.C. § 706, Congress has given HUD the authority to decide, within certain constraints, how to dispose of its property. Therefore, the court does not have jurisdiction to order HUD to sell the project in any particular manner nor to any particular entity; it can only set aside unlawful agency action and compel such action if it has been unlawfully withheld or unreasonably delayed.

Final Consent Judgment Entered Granting Tenants Permanent Injunctive Relief Against Mandatory Meal Plans

31,869. Johnson v. Soundview Apartments Hous. Dev. Fund Co., Inc., No. 81 Civ. 4803 (JES) (S.D.N.Y. May 15, 1987). Plaintiffs represented by Stephen Norman, Vermont Legal Aid, P.O. Box 1367, Burlington, VT 05402-1367, (802) 863-5620; Joy Blumkin. [Here reported: (Accession No. 1010050) 31,869-O Final Consent Judgment (3pp.). Previously reported at 20 CLEARINGHOUse Rev. 1325 (Feb. 1987).]

A final consent judgment has been entered granting plaintiff tenants permanent injunctive relief in this action challenging defendant housing authority's and HUD's use of mandatory meal plans for senior citizens living in public housing. Plaintiffs had alleged that defendants' meal plan constituted an illegal tying arrangement in violation of the Sherman Act. In addition to agreeing to cease enforcing the plan against any past, present, or future tenants and conditioning eligibility for housing on participation in the plan, defendants have agreed to pay partial restitution to the individual tenants who paid for meals that they never ate for reasons of employment, health, and taste. Counsel notes that, presumably in response to this case and several others nationwide, HUD has recently reversed its policy and prohibited future implementation of mandatory meal plans. The plans presently in operation, with certain exceptions, are not affected by the new regulation, 24 C.F.R. Part 278, 52 Fed. Reg. 6300-08 (Mar. 2, 1987).

Settlement Agreement Provides Minimum Standards for Emergency Housing Assistance in New York

38,504. Koster v. Perales, No. 82 Civ. 2892 (ILG) (E.D.N. Y. Apr. 24, 1987). Plaintiffs represented by Leonard Clark, Robin Sparks, Nassau/Suffolk Law Services Committee, 91 N. Franklin St., Hempstead, NY 11550, (516) 292-8100; Robert Hayes, Maria Foscarinis. [Here reported: (Accession No. 1010020) 38,504C Memo in Opp'n to County Defs' Motion to Dismiss

(36pp.); 38,504D Opinion & Order (12pp.); 38,504E Memo in Support of Plfs' Motion for Class Cert. (28pp.); 38,504F Plfs' Memo re Standing of the Coalition for the Homeless to Intervene (17pp.); 38,504G Amended Complaint (19pp.); 38,504H Opinion & Order (23pp.); 38,504-I Stipulation of Settlement (7pp.).]

The court has approved a stipulated settlement providing minimum standards for providing emergency housing assistance in this action brought by a class of homeless plaintiffs pursuant to 42 U.S.C. § 1983. Plaintiffs claimed that the failure of defendants, officials of the New York State and the Nassau County Departments of Social Services, to provide lawful emergency shelter, or to provide other than substandard shelter, to meet their needs violates the fourteenth amendment, the Social Security Act, and various other state and federal regulations. Subsequent to plaintiffs' certification as a class, the parties consented to, and the court adopted, a stipulated agreement. The agreement requires the county defendants to provide emergency housing on the same day that an appropriate request is made; to respond to requests for emergency housing assistance 24 hours per day, 7 days per week; and to provide adequate written notice of the right to request a fair hearing of any decision not to provide emergency housing. The agreement also sets minimum standards for emergency housing, including requirements that no more than two adults be placed in the same room, that clean linens be provided at least once a week, that no more than 10 people be required to share a bathroom, that each family be provided with at least one room that can be locked, and that a transportation allowance be provided to permit school-age children to attend school while in emergency housing. Counsel notes that the settlement ending this five-year litigation was approved by the judge in April 1987.

HUD Enjoined from Implementing Economic Mix Scheme in Setting Quotas That Exclude Very Low-Income Applicants

42,539. Paris v. HUD, No. 86-0624B (D.R.I. Jan. 21, 1987). Plaintiffs represented by John Dineen, Michael Milito, Rhode

Island Legal Services, 77 Dorrance St., Providence, RI 01903, (401) 274-2652. [Here reported: (Accession No. 1010070) 42,539A Fed. Def's Memo of Points & Auth. in Opp'n to Plfs' Motion for Prelim. Inj. (20pp.); 42,539B Memo in Support of Plfs' Motion for Prelim. Inj. (14pp.); 42,539C Memo in Opp'n to Def's Motion to Dismiss (6pp.); 42,539D Amended Complaint (11pp.); 42,539E Plfs' Memo in Support of Motion for Leave to File Amended Complaint (8pp.); 42,539F Plfs' Request for Admissions (12pp.); 42,539G Plfs' Memo in Support of Motion for Protective Order (3pp.); 42,539H Opinion & Order (8pp.); 42,539-1 Order (2pp.).]

Granting plaintiff class's motion for a preliminary injunction, the court has enjoined defendants, HUD, a private developer, and a management company, from implementing a tenant selection plan that they devised for a recently modernized public housing project. Named plaintiffs are very lowincome applicants for admission to the project who have been on a waiting list for public housing, some for as long as six years. Relying upon the economic mix language of the public housing statute as amended in 1974, 42 U.S.C. § 1437(c)(4)(A), defendants' plan set quotas for the number of modernized units to be rented to very low-income, low-income, and middleincome families. The plan did not adjust these quota categories for family size, but looked only to the income of the family unit. Once the specified percentage of families in an income group was attained in the project, the plan required selection of a family in the income group for which the quota had not yet been attained, even though the family was further down on the waiting list. The very low-income quota was quickly filled, and other eligible families from that category were skipped over in the tenant selection process because defendants were searching for families with higher incomes. Plaintiffs alleged that they were being discriminated against because of their incomes, and they asserted statutory, due process, and equal protection claims, arguing that the targeting requirements enacted in 1981, which reserved specified percentages of assisted units for very lowincome families, superceded the 1974 economic mix language and HUD's implementing regulations. Plaintiffs contended that, under such requirements, a newly modernized development that was only partially available and occupied in 1981 should be