Louisiana Landmarks Society, Inc. v. City of New Orleans ( 1996 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 95-30337
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LOUISIANA LANDMARKS SOCIETY, INC.,
Plaintiff-Appellee,
VERSUS
CITY OF NEW ORLEANS, RIVERGATE DEVELOPMENT CORPORATION,
and HARRAH’S JAZZ COMPANY, INC.,
Defendants-Appellants.
_________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
_________________________
June 7, 1996
Before POLITZ, Chief Judge, HIGGINBOTHAM and SMITH, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
The City of New Orleans, the Rivergate Development Corpora-
tion, and Harrah’s Jazz Company (collectively, “the defendants”)
appeal an order granting Louisiana Landmarks Society (“Landmarks”)
a permanent injunction against them. Concluding that Landmarks had
no private cause of action to seek the injunction, we reverse,
vacate the injunction, and dismiss for failure to state a cause of
action.
I.
In October 1971, the city applied for a federal open-space
land grant under title IV of the Housing and Urban Development Act
of 1970, Pub. L. 91-609, 84 Stat. 1770 (1970) (“HUD Act” or “Act”),
reprinted in 1970 U.S.C.C.A.N. 2069, 2083-87.1 These grants were
provided for the creation and maintenance of open-space areas
inside urban centers. See HUD Act § 701. One of the uses for
which grants were available was for “historic and architectural
preservation.” See id. § 702(b)(4).
The grant application proposed that the city turn a parking
lot into the Joan of Arc Plaza, a public area that would showcase
a statue of Joan of Arc and a pair of cannons. The statue and
cannons were gifts from France. The city ultimately obtained the
grant and built the plaza.
Congress terminated the open-space land program in 1975, but
it did not explicitly repeal § 705.2 This section required the
approval of the Secretary of the InteriorSSnot HUDSSprior to the
conversion of grant-assisted sites involving “historic or
Title IV of the 1970 act enacted the open-space land program at issue
here. Section 401, the only section in title IV, amended title VII of the
Housing Act of 1961. Section 401 replaced the existing text of title VII with
nine new sections numbered from 701 to 709. See 1970 U.S.C.C.A.N. at 2083-87.
These 700-series section numbers actually refer to sections of the 1961 act, the
sections added by the 1970 amendments. While Landmarks is formally suing under
§ 401 of the 1970 act, it is more convenient for us to cite to §§ 701-709 of the
1961 actSSwhen referring to portions of the 1970 amendmentsSSthan it would be to
cite to § 401 of the 1961 act. Thus, while we cite to sections of the 1961 act,
we are formally interpreting the 1970 amendments to the 1961 act.
This section states: “No open-space land involving historic or
architectural purposes for which assistance has been granted under this title
shall be converted to use for any other purpose without the prior approval of the
Secretary of the Interior.” HUD Act § 705. This section, while never repealed,
has been omitted from the United States Code because of the termination of the
grant program. See 42 U.S.C.A. § 1500c-1 (West 1994).
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architectural” purposes to uses other than those proposed in the
grant application. See id. § 705.
On December 5, 1994, bulldozers, under Harrah’s direction,
began clearing the Joan of Arc Plaza, but without harming the
statue or cannons. Landmarks obtained a temporary restraining
order (“TRO”) enjoining the defendants from converting the plaza to
something other than its allegedly historic purposes.
After a hearing, the district court issued a permanent
injunction, along the same lines as the TRO, against the
defendants. The defendants moved to amend the judgment so that it
would affect a narrow, precisely-defined area, and the court
granted this motion. The defendants now appeal the permanent
injunction, and Landmarks cross-appeals the amendment.
II.
It is undisputed that Congress did not expressly provide for
a private right of action in passing the HUD Act. If any such
cause of action exists, it must be one implied by the statute. The
defendants argue that the Act implied no such right of action.3
Cort v. Ash, 422 U.S. 66, 78 (1975), established a four-factor
Landmarks did not respond in its appellate brief to the defendants’
private-right-of-action argument, except for a single conclusionary reference in
the text of its brief and a single accompanying footnote. It contended that the
defendants had waived this argument below when they purported to waive their
standing argument.
We cannot help but find Landmarks’s position puzzling. Standing is a
concept distinct from the concept of private rights of action. Furthermore, to
the extent that Landmarks erroneously analyzed the implied-cause-of-action
argument as a standing argument, it should have known that standing is
jurisdictional and, therefore, non-waivable. Landmarks’s decision to deem this
issue waived has left us with only the benefit of the defendants’ briefing and
argument.
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test for determining whether a federal statute implies a private
right of action:
(1) Is this plaintiff a member of the class for whose
“especial” benefit the statute was passed? In other
words, does the statute create a federal right for this
plaintiff?
(2) Is there any evidence of legislative intent, either
explicit or implicit, to create or deny a private remedy?
(3) Is it consistent with the legislative scheme to imply
a private remedy?
(4) Is the cause of action one traditionally relegated to
state law so that implying a federal right of action
would be inappropriate?
See also Resident Council of Allen Parkway Village v. HUD, 980 F.2d
1043, 1053 (5th Cir.) (applying Cort test), cert. denied, 114 S.
Ct. 75 (1993). Furthermore, the Court explained in Touche Ross &
Co. v. Redington, 442 U.S. 560 (1979), that the touchstone of the
Cort analysis is the second factor, Congressional intent. See id.
at 568; see also Allen Parkway, 980 F.2d at 1054; Abate v. Southern
Pac. Transp. Co., 928 F.2d 167, 169 (5th Cir. 1991) (quoting
Thompson v. Thompson, 484 U.S. 174, 179 (1988)).
When analyzing a federal statute, we begin with the familiar
presumption “that Congress did not intend to create a private right
of action.” Allen Parkway, 980 F.2d at 1053. Generally, a
plaintiff asserting an implied right of action under a federal
statute “‘bears the relatively heavy burden of demonstrating that
Congress affirmatively contemplated private enforcement when it
passed the relevant statute.’” Id. (quoting Victorian v. Miller,
813 F.2d 718, 721 (5th Cir. 1987) (en banc)). Landmarks has failed
to carry this burden.
4
A.
Under the first Cort factor, we ask whether the plaintiff
belongs to an identifiable class of persons upon whom the statute
has conferred a substantive right. Abate, 928 F.2d at 169; see
Cannon v. University of Chicago, 441 U.S. 677, 690 (1979). Even if
a plaintiff can demonstrate membership in such a class, however,
the crucial inquiry remains one of Congressional intentSSi.e.,
whether Congress actually intended to create a private remedy. See
Thompson, 484 U.S. at 179; Touche Ross, 442 U.S. at 568; Abate, 928
F.2d at 169 (quoting Thompson). In answering the question of
Congressional intent, “as with any case involving the
interpretation of a statute, our analysis must begin with the
language of the statute itself.” Touche Ross, 442 U.S. at 568(citations omitted).
In this case, Landmarks cannot demonstrate that it is a
member of a class for whose special benefit the Act was passed. In
the Act’s statement of findings and purpose, Congress stated that
the grant program established under the Act was intended
to help curb urban sprawl and prevent the spread of urban
blight and deterioration, to encourage more economic and
desirable urban development, to assist in preserving
areas and properties of historic or architectural value,
and to help provide necessary recreational, conservation,
and scenic areas by assisting State and local public
bodies in taking prompt action to [inter alia] . . .
acquire, improve, and restore areas, sites, and
structures of historic or architectural value . . . .
HUD Act § 701(d). To the extent that there might be an
identifiable class of “persons” mentioned in this statute, it would
consist of “[s]tate and local public bodies”SSnot historical
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preservation societies such as Landmarks.4 This conclusion is
supported by the fact that the statute explicitly defines the terms
“State” and “local public body.” See HUD Act § 709.
It is both true and insufficient that historical preservation
societies are “a class that stands to gain some benefit from the
regulations and penalties promulgated under these provisions.”
Abate, 928 F.2d at 169. The statute, however, focuses on Landmarks
“only diffusely.” See id. In other words, it does not focus on
historical preservation societies any more than it “focuses” on
citizens at large.
Rather, the Act’s provisions are framed “‘as a general
prohibition or a command to a federal agency.’” Id. (quoting
Universities Research Ass’n, Inc. v. Coutu, 450 U.S. 754, 772
(1981)). The Act directs the Secretary of Housing and Urban
Development (“HUD”)SSwith some assistance from the Secretary of the
InteriorSSto execute a regulatory scheme consisting of (1) federal
financial assistance to state and local public bodies and
(2) restrictions attached to that assistance. This grant program,
prior to its termination, sought to benefit urban areas and
communities generally. While Landmarks, like any ordinary citizen,
may derive an indirect benefit from the enforcement of the
regulatory scheme, that attenuated benefit5 does not rise to the
We emphasize that we are not suggesting that the statute implies a
private right of action in favor of state and local public bodies. Rather, we
simply point out that the only “persons” identified in the text of the statute
are state and local public bodies.
In contrast to the statute here, title IX of the Education Amendments of
(continued...)
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level required to support implication of a private right of action.
See id.6
Landmarks therefore has failed to establish that it falls
within an identifiable class of persons for whose special benefit
the Act was passed. Because Touche Ross instructs us that
Congressional intent is always the critical inquiry in an implied-
right-of-action analysis, see 442 U.S. at 568, we consider that
Cort factor as well.
B.
The most telling indicator of Congressional intent regarding
this grant program is Congress’s termination of it as of January 1,
1975. See 42 U.S.C. § 5316(a) (1995) (prohibiting new grants or
loans after January 1, 1975, underSSinter aliaSStitle VII of the
Housing Act of 1961). While Congress did not explicitly repeal
§ 705SSthe provision governing conversion of grant-assisted land to
other usesSSit did decide to pursue a different legislative agenda
(...continued)
1972SSthe statute from which the Cannon Court inferred a private right of
actionSScreated a direct benefit for an identifiable class of persons: “No
person in the United States shall, on the basis of sex, be excluded from
participation in, be denied the benefits of, or be subjected to discrimination
under any education program or activity receiving Federal financial assistance.
. . .” 20 U.S.C. § 1681(a) (1990). This language has not been amended since the
decision in Cannon.
In explaining the proposition that a stream of indirectly derived
benefits does not flow from a private cause of action, the Abate court offered
three supporting citations: Till v. Unifirst Fed. Sav. & Loan Ass’n, 653 F.2d
152, 158 (5th Cir. Unit A 1981); United States v. Capeletti Bros., Inc., 621 F.2d
1309, 1314 (5th Cir. 1980); and Rogers v. Frito Lay, Inc., 611 F.2d 1074, 1079-80
(5th Cir.), cert. denied, 449 U.S. 889, and cert. denied, 449 U.S. 889 (1980).
Abate, 928 F.2d at 169. Prior to our decision in Abate, we had characterized
these cases as “decisions in which this court denied private rights of action
under statutes that imposed duties of enforcement upon federal departments and
agencies.” Hondo Nat’l Bank v. Gill Sav. Ass’n, 696 F.2d 1095, 1100 (5th Cir.
1983) (emphasis added).
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regarding open-space land and to eliminate the grant program.
Given the Supreme Court’s general disapproval of implied private
rights of action, it would be anomalous to infer one from a defunct
federal grant program.
Furthermore, the provisions of the statute are framed “‘as a
general prohibition or a command to a federal agency.’” Abate, 928
F.2d at 169 (quoting Coutu, 450 U.S. at 772). Like the statute at
issue in Abate, this one “creates no rights in favor of
individuals”; rather, it “imposes duties on a federal agency and
grants the agency the power to fulfill those duties.” Id. Stated
concisely, the language of the HUD Act is “duty-creating,” not
“right-creating” like the statute in Cannon. See id. at 169 n.3
(quoting title IX of the Education Amendments of 1972 (“title IX”),
the statute from which the Cannon Court inferred a right of
action). And, as the Cannon Court stated, “the right- or duty-
creating language of the statute has generally been the most
accurate indicator of the propriety of implication of a cause of
action.” Cannon, 441 U.S. at 690 n.13.
Moreover, we must not overlook the fact that this is a federal
funding statute. As stated in the Act itself, Congress’s purpose
in enacting this statute was to “assist” state and local public
bodies in creating and maintaining open-space land in urban areas.
See HUD Act § 701(d). The statute created a grant program composed
of federal-state and federal-locality partnerships, each of which
properly was characterized as a contract between the federal
government and a state or local public body. Cf. Pennhurst State
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Sch. and Hosp. v. Halderman, 451 U.S. 1, 17 (1981) (stating that
“legislation enacted pursuant to [Congress’s] spending power is
much in the nature of a contract”).
When dealing with a classic federal funding statute like this
one, inferring a private right of action is disfavored: “[A]s a
general rule, courts have been reluctant to infer a congressional
intent to create private rights under appropriations measures.”
Allen Parkway, 980 F.2d at 1052. Thus, courts generally should
decline to entertain claims by private persons that a state or
local public body is not complying with a federal-state contract.
“In legislation enacted pursuant to the spending power, the typical
remedy for state noncompliance with federally imposed conditions is
not a private cause of action for noncompliance but rather action
by the Federal Government to terminate funds to the State.”
Pennhurst, 451 U.S. at 28.7
In this case, because federal funds were given to the city as
a one-time grant, Congress provided other means of enforcing the
terms of the federal-state contract. It is apparent from the
structure and text of the statute that Congress committed
Nothing in Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 (1992),
diminishes the force of this language from Pennhurst as it applies here.
Franklin considered the availability of money damages as a remedy for violations
of title IX. See id. at 62-63. While the Court acknowledged that the language
from Pennhurst limited the remedies available under federal funding statutes in
cases of unintentional discrimination, it declined to extend that limitation to
cases of intentional discrimination. See id. at 74. This apparent limitation
of Pennhurst speaks only to the availability of remedies where a statutory right
of action already exists, as in the case of title IX. Indeed, as the Franklin
Court itself stated, “the question of what remedies are available under a statute
that provides a private right of action is ‘analytically distinct’ from the issue
of whether such a right exists in the first place.” Id. at 65-66 (quoting Davis
v. Passman, 442 U.S. 228, 239 (1979)). Thus, nothing in Franklin casts any doubt
on our general rule, see Allen Parkway, 980 F.2d at 1052, that inferring private
rights of action from appropriations measures is disfavored.
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administration of the grant program to the Secretary of HUD, who
was to be assisted in some capacities by the Secretary of the
Interior. Sections 701 to 709 of the Act repeatedly refer to the
Secretary of HUD, carefully describing his duties in administering
the grant program. Conspicuously absent is any mention of private,
third-party enforcement of this contract between the federal
government and the city. Rather, enforcement of the terms of the
contract is committed to the executive authority of the Secretary
of HUD.
In Former Special Project Employees Ass’n v. City of Norfolk,
909 F.2d 89 (4th Cir. 1990), the court held that the Model Cities
ActSSanother HUD grant programSSdid not imply a private right of
action. See id. at 92-93. The court cited approvingly cases from
the Ninth and Eleventh Circuits holding that “funding statutes
typically are not sufficiently focused on the benefiting class to
confer federal rights on the members of the class.” Id. at 92.
The court also quoted with approval the language from Pennhurst
disavowing implied private rights of action for noncompliance with
the terms of a federal-state contract. See id. at 93.
The structure and language of § 705 constitute overwhelming
evidence that Congress did not contemplateSSlet alone
authorizeSSprivate enforcement of the open-space land program.
Where analysis of the first two Cort factors leads to the
conclusion that Congress did not intend to create a private right
of action, we need not address the other two Cort factors. See
California v. Sierra Club, 451 U.S. 287, 298 (1981) (citing Touche
10
Ross, 442 U.S. at 574-76).
We therefore hold that § 705 does not imply a private right of
action. Accordingly, we REVERSE, VACATE the permanent injunction,
and render a judgment of dismissal for failure to state a cause of
action. Landmarks’s cross-appeal regarding the scope of the
injunction is DISMISSED as moot.
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