United States v. Columbus Country Club ( 1990 )

OPINION OF THE COURT

SEITZ, Circuit Judge.

The government appeals from two orders of the district court resulting in the dismissal without trial of its action to enforce Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), as amended, 42 U.S.C. § 3601 et seq. (1988). Jurisdiction in the district court was based on 42 U.S.C. § 3613 (1982), recodified at 42 U.S.C. § 3614 (1988), and 28 U.S.C. § 1345 (1988). We have jurisdiction under 28 U.S.C. § 1291 (1988).

I.

The facts material to our disposition are not in dispute. The Columbus Country Club (defendant) was formed in 1920 by the Knights of Columbus, a Roman Catholic men’s organization, and incorporated in 1922 as the Tri-Council Country Club. It changed its name to the Columbus Country Club in 1924. In 1936, defendant eliminated the requirement that members belong to the Knights of Columbus but retained the requirement that members be Catholic males. There is no legal relationship with the Knights of Columbus.

Defendant presently maintains a community of 46 summer homes (called “bungalows”) located on a 23-acre tract of land along the Delaware River north of Philadelphia. Defendant’s by-laws prohibit members from occupying their bungalows from October through April. Even if a family wanted to live in a bungalow year round, the lack of running water and heating facilities would make it impracticable. In addition to the summer homes, the property includes a clubhouse, a barn for lawn care equipment, a chapel and a grotto. Recreational facilities include a tennis court, playground, shuffleboard court and a swimming area. Defendant has a liquor license.

Defendant is organized as a non-profit organization, and its membership is comprised of annual, associate and social members. Annual members are those members who own bungalows and vote on all matters affecting the organization. The annual members own the land collectively. Pursuant to a leasehold agreement, defendant leases bungalow lots to the annual members for an annual fee. Annual members must be members in good standing of the Roman Catholic Church.¹ Associate members are adults over age 21 who live in the bungalows throughout the summer, but are not annual members. These individuals are generally the immediate family of annual members. Social members are close friends and relatives of annual members who do not occupy bungalows throughout the summer. Neither associate members nor social members are required to be Roman Catholic.

Defendant is not formally affiliated with the Roman Catholic Church, nor with any Catholic organization. Prior to 1987, the “purpose” section of defendant’s by-laws did not mention Catholicism or affiliation with the Roman Catholic Church. As laid out in the original charter:

The purpose for which the corporation is formed is the maintenance of a Club for social enjoyments, in order to cultivate cordial relations and sentiments of friendship among its members and provide accommodations for social intercourse, outdoor sport, and healthful recreation for them.

Notwithstanding the lack of formal ties between the Church and defendant, many of its members are practicing Catholics. In 1922, the Archbishop of Philadelphia granted the club special permission for the celebration of mass on the club grounds each Sunday and provided a priest from a nearby town for such services. Some members conduct the rosary each night in the chapel. A statue of the Virgin Mary stands in the grotto near the entrance to the club.

Defendant follows a formal procedure in admitting new members to the community. Since the 1987 amendments to the by-laws, the membership applications must be accompanied by a written recommendation from the applicant’s parish priest stating that the applicant is a practicing Roman Catholic in good standing. The full Board, by majority vote, makes the final decision on the admission of new members. There have been thirty-one transfers of ownership interests in bungalows since 1970. Since 1968, only four applicants have not been approved for annual membership.

II.

This lawsuit stems from the efforts of associate member Anita Gualtieri to become an annual member. Mrs. Gualtieri first applied for membership in 1986 so that she could purchase from her mother the leasehold on the bungalow that her family had held since the 1950’s.² She was informed that she was not eligible for annual membership because she was a woman. Her husband was also ineligible for annual membership because he was not a member of the Roman Catholic Church. Failing to have the eligibility requirements amended, Mrs. Gualtieri wrote to the Cardinal’s Commission on Human Relations and Urban Ministry to complain of defendant’s discriminatory practices. After an investigation, the Archdiocese informed defendant that the allegations were not unwarranted and threatened to withdraw permission to hold mass at the club. Subsequently, defendant revised its by-laws to make them gender-neutral, but did not alter the requirement that annual members be Roman Catholic. Rather, language was added to the purpose section emphasizing the religious aspects of the community’s life and adding the requirement of a written statement from the parish priest attesting to an applicant’s status as a member of the Roman Catholic Church.

Mrs. Gualtieri reapplied for annual membership in 1987. The Board of Governors considered and voted against her application based allegedly on the family’s prior demonstrated lack of ability to get along with the community and lack of interest in the religious aspects of the community.

Mrs. Gualtieri notified the Civil Rights Division of the Department of Justice of defendant’s policies, and it subsequently filed suit, alleging a pattern and practice of discrimination in the sale of dwellings, on account of religion and sex, in violation of the Fair Housing Act. After a hearing on the parties’ cross-motions for summary judgment, the district court held that defendant was exempt from the Act under both the religious organization and private club exemptions. The court granted defendant’s motion for summary judgment on the religious discrimination claim. The court went on to deny both parties’ motions for summary judgment on the sex discrimination claim because there was a disputed issue of material fact. The government filed a motion for reconsideration, noting that if the private club exemption applied, it would bar both the sex and religious discrimination claims. The district court subsequently granted the motion and then dismissed the action in its entirety with prejudice.

The government filed a timely notice of appeal. This court exercises plenary review over the grant of summary judgment. United States v. One 107.9 Acre Parcel of Land, 898 F.2d 396, 398 (3d Cir.1990). Viewing the record in the light most favorable to the government, we may affirm only if there is no genuine issue of material fact and defendant is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The parties do not assert that there are material issues of fact. Therefore, our task is to determine whether the “evidence ... is so one-sided that one party must prevail as a matter of law.” Liberty Lobby, 477 U.S. at 251-52, 106 S.Ct. at 2511-12.

III.

FAIR HOUSING ACT

The government alleges that defendant’s policy and practice of prohibiting the sale of bungalows to non-Catholics violates the Fair Housing Act. That Act makes it unlawful “[t]o refuse to sell or rent ... or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” 42 U.S.C. § 3604(a) (1988). Defendant does not deny that it discriminates on the basis of religion; rather, it contends that the bungalows are not “dwellings” because they are not capable of being occupied as year-round residences. Thus, defendant asserts that the Fair Housing Act does not apply to it.

This court exercises plenary review over questions of statutory construction. Chrysler Credit Corp. v. First Nat’l Bank and Trust Co., 746 F.2d 200, 202 (3d Cir.1984). Furthermore, "[t]o the extent that we review the application of the law to the facts, our review is plenary.” United States v. Lansdowne Swim Club, 894 F.2d 83, 85 (3d Cir.1990); see also Petrella v. Kashlan, 826 F.2d 1340, 1343 (3d Cir.1987); United States v. Adams, 759 F.2d 1099, 1106 (3d Cir.), cert. denied, 474 U.S. 906, 106 S.Ct. 275, 88 L.Ed.2d 236 (1985).

This court must first determine whether defendant’s bungalows are dwellings. The Fair Housing Act defines “dwelling” to mean:

any building, structure, or portion thereof which is occupied as, or designed or intended for occupancy as, a residence by one or more families, and any vacant land which is offered for sale or lease for the construction or location thereon of any such building, structure, or portion thereof.

42 U.S.C. § 3602(b) (1988). Although the meaning of the word “residence” is central to understanding this definition, the Act provides no statutory definition of that term. In such cases, “it is appropriate to assume that the ordinary meaning of the language that Congress employed ‘accurately expresses the legislative purpose.’ ” Mills Music, Inc. v. Snyder, 469 U.S. 153, 164, 105 S.Ct. 638, 645, 83 L.Ed.2d 556 (1985) (quoting Park and Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 195, 105 S.Ct. 658, 662, 83 L.Ed.2d 582 (1985)).

In United States v. Hughes Memorial Home, 396 F.Supp. 544, 549 (W.D. Va.1975), the court followed this rule of statutory construction and concluded that Title VIII applied to a children’s home. In reaching that conclusion, the court applied the definition in Webster’s Third New International Dictionary which provides that a residence is:

a temporary or permanent dwelling place, abode or habitation to which one intends to return as distinguished from the place of temporary sojourn or transient visit.

Id.

Other courts that have looked at the issue of temporary residence have agreed with Hughes Memorial. See Patel v. Holley House Motels, 483 F.Supp. 374, 381 (S.D. Ala.1979) (a motel is not a dwelling because it is not used for occupancy as a residence, but rather provides lodgings to transient guests); Baxter v. City of Belleville, 720 F.Supp. 720, 731 (S.D. Ill.1989) (facility for AIDS victims is a dwelling because persons “will not be living there as mere transients”); see also, R. Schwemm, Housing Discrimination Law 53 (1983) (Title VIII “would presumably cover ... facilities whose occupants remain for more than a brief period of time and who view their rooms as a residence ‘to return to.’ ”). We agree with these cases and hold that the central inquiry is whether the defendant’s annual members intend to remain in the bungalows for any significant period of time and whether they view their bungalows as a place to return to.

Applying this standard to the undisputed facts, we conclude that the annual members are not “mere transients.” In any year, annual members may spend up to five months in their bungalows. Furthermore, nearly all of the annual members return to their bungalows summer after summer. Indeed, in the last twenty years there have been only thirty-one transfers of ownership within the community of forty-six bungalows. Consequently, defendant’s bungalows fall within the ordinary meaning of “residence” and must be considered dwellings for purposes of the Fair Housing Act.

Finally, there is no indication in the statutory language that Congress intended to limit coverage of the Act to year-round places of abode and exempt seasonal dwellings. To recognize a distinction based on seasonal residency would, as the government contends, create a broad exception to the Act that would permit, for example, residents in a private development of summer homes to lawfully exclude blacks from owning, renting or occupying the homes. Therefore, we agree with the district court that the bungalows fall within the statutory definition of “dwelling” and that defendant is subject to the provisions of the Act.

IV.

STATUTORY EXEMPTIONS

Defendant asserts that even if the bungalows fall within the statutory definition of “dwelling,” it is exempt from the Fair Housing Act under the exemptions provided by 42 U.S.C. § 3607(a) for religious organizations and private clubs. “Under general principles of statutory construction, ‘[o]ne who claims the benefit of an exception from the prohibition of a statute has the burden of proving that his claim comes within the exception.’ ” Mills Music, Inc., v. Snyder, 469 U.S. 153, 188 n. 20, 105 S.Ct. 638, 657 n. 20, 83 L.Ed.2d 556 (1985) (White, J., dissenting) (quoting 2A C. Sands, Sutherland on Statutory Construction § 47.11, at 145 (rev. 4th ed. 1984)); see also United States v. First City Nat’l Bank, 386 U.S. 361, 366, 87 S.Ct. 1088, 1092, 18 L.Ed.2d 151 (1967); cf. United States v. Lansdowne Swim Club, 894 F.2d 83, 85 (3d Cir.1990) (burden on defendant to show entitlement to Title II private club exemption); Singleton v. Gendason, 545 F.2d 1224, 1226 (9th Cir.1976) (burden on defendants-appellees to show entitlement to Title VIII single-family exemption, 42 U.S.C. § 3603(b)(1)). Thus, defendant has the burden of proving that it falls within the statutory exemption provided for religious organizations or private clubs as a matter of law.

RELIGIOUS ORGANIZATION EXEMPTION

Defendant’s first affirmative defense is that it is exempt from the Fair Housing Act under section 807(a)’s exemption for religious organizations. That exemption provides, in pertinent part that:

Nothing in this subchapter shall prohibit a religious organization, association, or society, or any non-profit institution or organization operated, supervised or controlled by or in conjunction with a religious organization, association, or society, from limiting the sale, rental or occupancy of dwellings which it owns or operates for other than a commercial purpose to persons of the same religion, or from giving preference to such persons, unless membership in such religion is restricted on account of race, color, or national origin.

42 U.S.C. § 3607(a) (1988). To fit into this exemption, defendant must prove that it is either: (1) a religious organization, or (2) a non-profit organization “operated, supervised or controlled by or in conjunction with” a religious organization.

The district court concluded and defendant does not dispute that it is not itself a “religious organization.” The dispute centers instead upon whether defendant is “operated, supervised or controlled by or in conjunction with” a religious organization.

The government argues that the quoted language implies a hierarchical relationship in which the non-profit entity is subordinate to the religious organization. At the very least, the government contends, there must be some direct affiliation between the religious organization and the other organization, as would be the case with a religious school, for example. This interpretation finds some support in the limited legislative history.³ Senator Mondale, whose amendment to the 1968 Civil Rights Act was adopted by Congress to create Title VIII, stated: “There is an exemption to permit religious institutions or schools, etc., affiliated with them, to give preference in housing to persons of their own religion despite the Act.” 114 Cong.Rec. 2273 (Feb. 6, 1968) (emphasis added).

As the government argues, the Catholic Church does not operate, supervise or control defendant. There is no formal or legal relationship between them. At the most, the Church approves of and supports defendant by permitting religious services to be conducted on the premises.

Defendant responds that it is “operated in conjunction with a religious organization” and is directly affiliated with the Catholic Archdiocese. In support of its response, defendant argues that the exemption for religious organizations should be read broadly, and that the undisputed facts demonstrate that defendant is entitled to the exemption as a matter of law.

Defendant contends that the broad language of the exemption and the common dictionary meaning of the words used indicate that the relationship between the religious organization and the non-profit organization may consist of anything ranging from a formal, highly structured, hierarchical relationship to an informal, loosely-structured relationship. Additionally, defendant asserts, the religious exemption reflects Congress’s sensitivity to first amendment rights. Consequently, defendant argues, the exemption should be broadly construed to cover activity that is permitted, but not required, by the Church.

We cannot agree with defendant’s contention that the exemption is to be read broadly. A unanimous Supreme Court mandated in Trafficante v. Metropolitan Life Ins., 409 U.S. 205, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972), a “generous construction” of the Fair Housing Act, id. at 212, 93 S.Ct. at 368, in order to carry out a “policy that Congress considered to be of the highest priority.” Id. at 211, 93 S.Ct. at 367. See also Resident Advisory Bd. v. Rizzo, 564 F.2d 126, 147 (3d Cir.1977), cert. denied, 435 U.S. 908, 98 S.Ct. 1457, 1458, 55 L.Ed.2d 499 (1978). The logical corollary to such a construction, as well as the general rule of statutory interpretation, is to construe narrowly any exemptions to the Act. Such a narrow reading is also supported by the only case interpreting Title VIII’s religious exemption that we have found. See United States v. Hughes Memorial Home, 396 F.Supp. 544, 550 (W.D. Va.1975) (“In view of the Supreme Court’s holding that the Fair Housing Act must be accorded a generous construction, the general principle requiring the strict reading of exemptions from the Act applies here with even greater force.”) (citation omitted).

In holding that defendant fell within the exemption for religious organizations, the district court relied upon the defendant’s affiliation with the Church as evidenced by the Church’s grant of the privilege of having weekly mass celebrated on the grounds and its tacit approval of the recital of the rosary. In reaching its conclusion, the district court found that the Catholic Church does not actually “control” the club or its operations. The district court did state, however, that “the persons who, over the years, have operated and controlled the club, have done so ‘in conjunction with’ their continuing obligations as members of the Roman Catholic faith,” and went on to conclude that “[a]s a practical matter, by virtue of its ability to grant or withhold the privilege of holding religious services in the club chapel ... the Archdiocese does possess a very significant degree of control over the club itself.” United States v. Columbus Country Club, No. 87-8164, slip op. at 10-11, 1989 WL149935 (E.D.Pa. 1989).

We do not think that these undisputed facts are sufficient to hold that defendant carried its burden. The critical words of the exemption are “in conjunction with,” and so there must be a mutual relationship between the non-profit society and a religious organization. The existence of this relationship cannot depend solely on the activities of the non-profit organization nor be viewed only from its perspective. Indeed, evidence of the club’s unilateral activities would go to whether it is itself a religious organization not to whether it is operated “in conjunction with” a religious organization. Furthermore, the Church’s ability to withdraw permission to hold mass and the fact that on one occasion it may have indirectly influenced the club’s Board of Governors by threatening to do so are not enough. Without further evidence of interaction or involvement by the Church, we cannot conclude that as a matter of law the Church controlled the defendant or that the defendant was operated “in conjunction with” the Church. Consequently, on this record and in light of our unwillingness to read the statutory exemption broadly, we hold that the defendant failed to carry its burden of proving its entitlement to the religious organization exemption.

PRIVATE CLUB EXEMPTION

Defendant’s second affirmative defense is that it falls within the exemption for private clubs, as the district court held. Again, the defendant has the burden of proving its entitlement to this statutory exemption.

The Fair Housing Act states in pertinent part:

Nor shall anything in this subchapter prohibit a private club not in fact open to the public, which as an incident to its primary purpose or purposes provides lodgings which it owns or operates for other than a commercial purpose, from limiting the rental or occupancy of such lodgings to its members or from giving preference to its members.

42 U.S.C. § 3607(a) (1988) (emphasis added). We believe that to fall within this statutory exemption five conditions must be met. The defendant must: (1) be a “private club not in fact open to the public”; (2) provide “lodgings;” and (3) only limit the “rental or occupancy of such lodgings.” Furthermore, if a defendant provides “lodgings,” those lodgings must be: (4) provided “as an incident to its [defendant’s] primary purpose or purposes;” and (5) owned or operated “for other than a commercial purpose.” We do not address the district court’s determination that the defendant was a private club satisfying condition (1) because we are content that our conclusions with respect to conditions (2) and (3) are fully dispositive.

To determine whether defendant’s bungalows satisfy condition (2), we begin, as we must, by examining the statutory text. See Mills Music, Inc., v. Snyder, 469 U.S. 153, 164, 105 S.Ct. 638, 645, 83 L.Ed.2d 556 (1985). Since the private club exemption is part of the same section that provides the exemption for religious organizations, it is instructive to note the differences. In the first place, the word “lodgings” has replaced the word “dwellings,” and the word “sale” has been deleted. Furthermore, the private club exemption requires that the club provide lodgings only “as an incident to its primary purpose or purposes.” Thus, the overall effect of these changes is to carefully limit the exemption.

Congress’ intention to limit the exemption is borne out by the legislative history.⁴ Senator Kuchel, the sponsor of the amendment that modified the wording of the exemption, explained that the purpose of the changes was: “to tighten the exemption now provided in the substitute referring to bona fide private clubs.” 114 Cong.Rec. 5526 (Mar. 6, 1968).

Defendant argues that it provides “lodgings,” because according to the dictionary, a lodging is a “dwelling,” and Congress drew no durational distinction between the two terms, as it did in Title II when it modified “lodging” with the words “to transient guests.”⁵ This indicates, defendant contends, that the word lodging by itself does not connote occupancy of limited duration and therefore the terms “lodging” and “dwelling” should be considered interchangeable.

The government responds that defendant does not provide “lodgings” because its bungalows are “dwellings” in the sense of summer residences, not temporary accommodations as Congress intended.

Although the district court recognized that a distinction might be drawn between “dwelling” and “lodging” on the basis of the duration of contemplated occupancy, it did not agree that Congress intended this distinction to have any significance. We do not think that this conclusion comports with Congress’ deliberate substitution of the word “lodging” for “dwelling” and the plain statement of intent repeatedly expressed by Senator Kuchel, the amendment’s sponsor, that the language modifications were designed “to tighten [Senator Dirksen’s] amendment as much as possible to avoid possible abuse.” 114 Cong.Rec. 5526 (Mar. 6, 1968). Therefore, we conclude that defendant has not shown that it provides “lodgings” as required by condition (2) of the private club exemption.

The government also argues that the defendant fails to satisfy condition (3) because the private club exemption, by its express terms, applies only to the “rental or occupancy” of lodgings, not to their sale. Thus, the government claims that even if defendant were found to meet all the other conditions of the private club exemption, it cannot protect the discriminatory sale of dwellings by its annual members. Again, the government asserts that this interpretation is borne out by the legislative history which indicates that the word “sale” was deleted at the same time that the word “lodging” was substituted for “dwelling.”

At oral argument, defendant responded to the government’s argument, contending that it meets the “rental or occupancy” requirement. Defendant’s argument is that by limiting the sale of the bungalows to Catholics, the club is limiting the occupancy of the bungalows and the rental of the ground on which the bungalows sit. So, defendant argues, the club is “in effect” limiting the occupancy and rental of lodgings.

Although the district court noted the government’s argument, it did not address the government’s position. We believe that the plain language of the exemption and the legislative history of the Act exempt only the “rental or occupancy” of lodgings, not their sale. So, even though limiting the sale of bungalows to Catholics might have the effect of limiting the rental or occupancy of lodgings, we conclude that defendant’s policy and practice of discriminating against persons in the sale of bungalows falls outside the plain language of the private club exemption.

We conclude that defendant has failed to show that the bungalows are lodgings and that its restrictions upon the sale of bungalows are merely limits on “rental or occupancy.” Therefore, we conclude that as a matter of law defendant has not met its burden of proving that it falls within Title VIII’s limited statutory exemption for private clubs.

Defendant also argues that application of the Fair Housing Act violates the free exercise and establishment clauses of the first amendment as well as the defendant’s first amendment right to free association. Because the district court did not address those arguments, we will not do so either, preferring to have the district court consider them in the first instance.

V.

We are satisfied that the record does not, as a matter of law, support summary judgment for defendant on either of its affirmative defenses. We will, therefore, reverse the orders of the district court ruling that defendant meets the religious organization and private club exemptions of the Fair Housing Act and dismissing the government’s claim against the Columbus Country Club and remand for further proceedings.

1 . Until amendment of the by-laws in 1987, the club restricted annual membership to men.

2 . Mrs. Gualtieri’s mother inherited her deceased husband's leasehold and quasi-proprietary interest in their bungalow. As a widow, she was given all the rights under the leasehold except annual membership in the club since at that time annual membership was restricted to males.

3 . Since the statute was enacted with only minimal changes from the way it was first introduced by Senator Dirksen on the floor of the Senate, its legislative history does not include the committee reports and other documents that usually accompany major legislation. See Resident Advisory Bd. v. Rizzo, 564 F.2d 126, 147 n. 29 (3d Cir.1977), cert. denied, 435 U.S. 908, 98 S.Ct. 1457, 1458, 55 L.Ed.2d 499 (1978).

4 . The private club exemption was introduced in Senator Dirksen’s amendment to his own substitute bill. The original wording was:

Nor shall anything in this title prohibit a bona fide private club from limiting the sale, rental, or occupancy of dwellings which it owns or operates for other than a commercial purpose to members of the club or from giving preference to such members.

114 Cong. Rec. 4690 (Feb. 29, 1968) (emphasis added). Senator Kuchel subsequently introduced an amendment that substituted the word "lodgings" for "dwellings,” deleted the word "sale," and added the language "as an incident to its primary purpose or purposes.” 114 Cong. Rec. 5526 (Mar. 6, 1968).

5 . Section 201 et seq. of Title II prohibits discrimination in places of public accommodation. 42 U.S.C. § 2000a et seq. (1988). A place of public accommodation is defined in part as: "any inn, hotel, motel, or other establishment which provides lodging to transient guests_” 42 U.S.C. § 2000a(b)(l) (1988).