## Facts

- The City of Farmers Branch, Texas enacted Ordinance 2903 regulating occupancy of rental housing based on tenants’ citizenship or “eligible immigration status.”
- Ordinance 2903 required landlords to verify prospective tenants’ status, prohibited “knowingly” renting to persons without “eligible immigration status,” and imposed criminal penalties and fines on landlords for violations.
- The ordinance defined “eligible immigration status” by borrowing classifications used in federal HUD regulations governing eligibility for certain federal housing assistance programs.
- Farmers Branch voters approved Ordinance 2903 by referendum in May 2007.
- Apartment owners/managers and tenants sued, alleging the ordinance forced private parties to act as immigration screeners and would lead to exclusion or eviction based on immigration status.
- The district court issued a temporary restraining order and then a preliminary injunction blocking enforcement of Ordinance 2903.
- While the litigation over Ordinance 2903 was pending, the City enacted Ordinance 2952, which required tenants to obtain a “residential occupancy license” and directed the city’s building inspector to verify “lawful presence” with the federal government for noncitizen applicants.
- The City moved for leave to file a counterclaim seeking a declaratory judgment that Ordinance 2952 was lawful.

## Issues

1. Whether the City should be granted leave under Federal Rule of Civil Procedure 15(a) to add a counterclaim for declaratory judgment regarding the legality of Ordinance 2952.
2. Whether a municipal rental-occupancy scheme conditioning private leasing on immigration status is preempted by federal immigration law under the Supremacy Clause.
3. Whether using HUD immigration-status categories designed for federal benefits programs in a local enforcement and penalty scheme conflicts with federal objectives.

## Decision

- The court denied the City’s motion for leave to file an original counterclaim for declaratory judgment concerning Ordinance 2952.
- The court treated the case as already centered on the preemption challenge to Ordinance 2903 and maintained injunctive relief against its enforcement.
- In the broader merits context described in the court’s rulings, the ordinance was viewed as preempted because it functioned as an impermissible local regulation of immigration and conflicted with the federal scheme.

## Legal Principles

- Leave to amend under Rule 15(a) may be denied for undue delay and undue prejudice to the opposing party, among other recognized reasons.
- Federal authority over immigration status and the terms on which noncitizens may remain in the United States is primarily committed to the national government; local measures that effectively determine which noncitizens may live in a city risk field preemption.
- Local enactments that add housing-based sanctions tied to immigration classifications can conflict with the Immigration and Nationality Act’s comprehensive framework and federal enforcement choices, supporting conflict/obstacle preemption.
- Federal regulatory categories created for administering federal benefits (such as HUD eligibility classifications) do not necessarily authorize local governments to re-purpose those categories into local criminal or licensing enforcement mechanisms.

## Conclusion

The district court refused to allow the City to inject a new ordinance into an advanced case through a late counterclaim and, in the litigation’s merits posture, treated the earlier rental ordinance as federally preempted because it operated as immigration regulation and obstructed federal immigration policy.


Villas at Parkside Partners v. City of Farmers Branch, 577 F. Supp. 2d 858 (N.D. Tex. 2008)