Texas Officials Not Liable for Lost FEMA Grant

     HOUSTON (CN) – A federal judge tossed civil rights claims by a New Orleans-based contractor that lost a $16 million contract to provide housing after the destructive hurricane season of 2005.



     The Federal Emergency Management Agency gave Heston Emergency Housing grant money to build 250 prefabricated homes for hurricane victims in Texas, according to the contractor’s federal complaint.
     While disbursing the grant money in Texas, the Texas Department of Housing and Community Affairs allegedly came under scrutiny from the U.S. House of Representatives and Congresswoman Sheila Jackson Lee, who questioned its use of the FEMA money.
     The contractor says it took heat from housing department employees and lost its contract in retaliation for their belief that Heston had ignored a gag order and made negative reports to Lee and others.
     Heston and its limited partner, Naji Al-Fouzan, accused the department and four of its employees of constitutional violations in a federal complaint filed in March 2011.
     On Thursday, however, U.S. District Judge Ewing Werlein Jr. dismissed the first amended complaint.
     Al-Fouzan lacked standing to support his claim for free speech retaliation, the 18-page order states.
     “In a corporation or partnership, a partner, employee, shareholder, or officer does not have standing to sue on his own behalf when the only alleged injury was to the partnership or corporation and not to himself personally,” Werlein wrote.
     The judge dismissed the housing department as a party, since Heston and Al-Fouzan, by their own admission, did not make any specific claims against the agency.
     Werlein also nixed the claims against the four housing department employees for free-speech retaliation and violations of the Fifth Amendment and the equal protection and due process clauses.

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