Artie Mahaley v. Cuyahoga Metropolitan Housing Authority, and Cityof Euclid , 500 F.2d 1087 ( 1974 )

WEICK, Circuit Judge.

This appeal involves a controversy over low-rent housing under the United States Housing Act of 1937, as amended, 42 U.S.C. § 1401 et seq.

Plaintiffs are three Cleveland residents, who claim to be eligible for public housing, and an association interested in public housing, named The PATH. They filed an action in the District Court on March 15, 1971 against Cuya-hoga Metropolitan Housing Authority (CMHA), a public housing agency, its Board and Executive Director, the municipalities of Euclid, Garfield Heights, Parma, Solon and Westlake (all suburbs of Cleveland) and their respective Mayors and councilmen, and the Department of Housing and Urban Development of the United States (HUD) and its Secretary, George Romney. Later the Court ordered that the case proceed as a class action.

The class alleged to be represented by the individual plaintiffs was “low income residents of the Greater Cleveland Ohio area, who by virtue of their poverty or race, or both, are unable to secure decent, safe and sanitary housing at rents which they can afford without the assistance of defendant CMHA.” None of the three named individual plaintiffs resided in any of the five defendant municipalities. One of the individual plaintiffs, Mahaley, resides in a CMHA project in Cleveland.

Under the Act, before low-rent housing may be constructed in a. given municipality there must be a local determination of need and “the governing body of the locality involved . . . [must have] entered into an agreement with the public housing agency providing for the local cooperation required by the Authority pursuant to this chapter . ”¹

In the first count of the complaint the plaintiffs attacked the constitutionality of the consent and cooperation agreement requirement of the Act.

Count two of the complaint alleged that the five municipalities had used the consent and cooperation agreement requirements of the Act as a means to exclude the plaintiffs and the classes they represent from living in these municipalities, in violation of their civil rights and of the Fourteenth Amendment to the Constitution of the United States.²

Plaintiffs prayed for an order directing CMHA to construct low-rent housing units in the five suburbs despite the consent requirement by the suburbs’ governing bodies as provided in subsection (7) (a) (i) of the Act, and the cooperation agreement requirement • of subsection (7) (b) (i) of the Act.

A three-Judge Court (Circuit Judge Celebrezze and District Judges Battisti and Lamb ros) was convened to consider the constitutional aspects of the case. There was a trial before the three-Judge Court and the case was submitted to it on the evidence which included stipulations, exhibits and depositions.

The three-Judge Court, in a signed Memorandum Opinion and Order stamped filed by the Clerk of the District Court on February 22, 1973 at 11:06 o’clock, a. m., found and determined that the cooperation agreement requirement of the Act (subsection (7)(b)(i)) was “constitutional both on its face and as applied . . . . ” (Emphasis added.) The order then dissolved the three-Judge panel and referred the case to a single Judge (Chief Judge Battisti) to determine “[t]he question of whether the defendants’ conduct violated the provisions of 42 U.S.C. Sec. 1983 . . . . ” District Judge Lambros dissented. No appeal to the Supreme Court was taken from that order and it has become final and is res judicata of the issues decided.

On the same day, about an hour later, at 12:14 o’clock p. m., there was filed with the Clerk of the District Court a 25-page Memorandum Opinion and Order of the single Judge, in which he completely disposed of the issue referred to him by the three-Judge panel without further argument or hearing. 355 F.Supp. 1257 (N.D.Ohio 1973).

The single Judge recognized that there had been remanded to him only the one question, whether plaintiffs’ rights under Section 1983 had been violated. He stated:

The question remaining before the court is whether the defendants have used the consent requirement as a tool to perpetuate segregation in violation of 42 U.S.C. § 1983.

(Id. at 1259)

In his Memorandum Opinion and Order, however, the single Judge found that the defendant suburbs had committed a prima facie violation of the Fourteenth Amendment to the Constitution by their failure to enter into a cooperation agreement with CMHA to build low-rent, federally-assisted housing in their communities.

On the issue of constitutionality, which had already been decided in favor of the suburbs by the three-Judge panel, the Judge stated:

Where there is prima facie evidence of discrimination, the burden is shifted to the defendant suburbs to come forward with a supervening necessity or compelling governmental interest to avoid a finding of unconstitutionality. (Id. at 1266).

The Judge then inferred discrimination on the part of the suburbs because of their failure and refusal to enter into cooperation agreements. He further stated:

The evidence amply demonstrates that the suburban defendants’ failures and refusals to contract, negotiate with CMHA, or enter into Cooperation Agreements, have the clear effect of discriminating against Negroes by excluding them from residing in these suburban municipalities and perpetuating existing racial concentration and segregation within the individual suburbs and throughout the metropolitan area. In the face of this evidence, the suburban defendants came forward with no logical rationale, compelling or otherwise, to explain their conduct. The record indicates that the actions of the defendant suburbs under color of law, discriminate against Negroes and other low income persons. Such actions violate the plaintiffs’ rights to equal protection of the law under the Fourteenth Amendment to the United States Constitution and are in violation of their rights under the various Civil Rights Acts. See 42 U.S.C. Sections 1981, 1982, 1983, 2000d and 3601 et seq. (Id. at 1266-1267).

The Judge further said:

The foregoing is contrary to the Thirteenth Amendment and the due process and equal protection clauses of the Fourteenth Amendment of the United States Constitution, the Civil Rights Act of 1964 and 1968, Title 42 U.S.C. Sections 1981, 1982, 1983, 2000d and 3601 et seq., the United States Housing Act of 1937 as amended, and regulations of the Department of Housing and Urban Development. (Id. at 1268)

The single Judge further stated:

State officials are refusing to sign a federally required document with the resulting effect of discrimination. (Id. at 1268)

In his judgment order the single Judge granted a rather unique form of relief. He treated the case before him like a school desegregation case and ordered CMHA “to prepare a plan setting forth the number of scattered site units it intends to place in each of the defendant surburbs.” The plan was required to include not only the residents of the suburbs but also' “residents of the City of Cleveland who wish to move into that community.” (Id. at 1269).

The order required the municipalities to object to the plan within ninety days and to give reasons if they have any why then cannot absorb the number of houses which CMHA desires to build there. The order further provided:

Unless the reasons . . . are constitutionally permissible and meet the compelling interest test, there will be no alternative but to conclude that the suburb’s failure to sign a Cooperation Agreement is for a constitutionally impermissible reason, to wit: racial discrimination and appropriate judicial action will be undertaken. (Id. at 1269) ³

The five municipalities appealed. We reverse.

The rulings of the single Judge and his order conflict with the decision of the three-Judge panel, and also conflict with the decision of the Supreme Court in James v. Valtierra, 402 U.S. 137, 91 S.Ct. 1331, 28 L.Ed.2d 678 (1971), where the court stated:

By the Housing Act of 1937 the Federal Government has offered aid to state and local governments for the creation of low-rent public housing. However, the federal legislation does not purport to require that local governments accept this or to outlaw local referendums on whether the aid should be accepted. (Id. at 140, 91 S.Ct. at 1333.)

The Court recognized that the people of a community have the right to decide whether they want low-rent housing, stating:

The people of California have also decided by their own vote to require referendum approval of low-rent public housing projects. This procedure ensures that all the people of a community will have a voice in a decision which may lead to large expenditures of local governmental funds for increased public services and to lower tax revenues. It gives them a voice in decisions that will affect the future development of their own community. This procedure for democratic decisionmaking does not violate the constitutional command that no State shall; deny to any person “the equal protection of the laws.” (Id. at 142-143, 91 S.Ct. at 1334)

The Supreme Court thus construed the plain language of the Act to mean exactly what it says, namely, that it is for the municipalities to decide whether they need low-rent housing and whether they desire to sign cooperation agreements. There is no basis to infer discrimination upon the part of a municipality for doing what it has a lawful right to do under the express provisions of the housing Act.

We think the three-judge Court was clearly right in ruling as it did that the Act was not only constitutional, but that it was constitutionally applied by the municipalities. It has now become final because the plaintiffs have not prosecuted an appeal to the Supreme Court.

The findings of a violation of the plaintiffs’ Section 1983 rights are also utterly inconsistent with the decision of the three-Judge panel, made only about one hour earlier. Plaintiffs could have a cognizable Section 1983 claim only if they could show that the Act was unconstitutional or that it had been unconstitutionally applied by local officials. Once the statute was held valid on its face and as applied by the five municipalities, there was no way in which a Section 1983 ease could be maintained; the only proper thing then for the single Judge to do with the Section 1983 claim was to dismiss it.

We are of the opinion further that there was a lack of jurisdiction over the municipalities on the Section 1983 claim because they cannot be considered as “persons”. City of Kenosha v. Bruno, 412 U.S. 507, 93 S.Ct. 2222, 37 L.Ed.2d 109 (1973); Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973); Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961); Johnson v. City of Cincinnati, 450 F.2d 796 (6th Cir. 1971).

We do not doubt that Section 1983 actions may lie against individual government officials to restrain them from violating the constitution. Egan v. City of Aurora, 365 U.S. 514, 81 S.Ct. 684, 5 L.Ed.2d 741 (1961), and Birnbaum v. Trussell, 347 F.2d 86 (2d Cir. 1965).

Here the order appealed from was not an order against individual councilmen, but was an order only against the five municipalities. The rulings of the Supreme Court in City of Kenosha, Moor, and Monroe cannot be circumvented by joining with the municipalities, as parties defendant, the individual members of their governing bodies, against whom no relief was sought. The single Judge granted relief only against the five municipalities and CMHA.

In oral argument one of counsel for appellees even went so far as to suggest that .the single Judge could order individual councilmen to vote for a cooperation agreement. While this course of action might have been a way to order relief without exceeding jurisdictional bounds, we think such action would have been highly improper. Quite simply, it would have been a violation of the separation of powers with the court acting as a legislature. We do not regard city councilmen, mayors, or managers, as state officers.

In our opinion plaintiffs have failed to prove that any of their constitutional rights were violated. The mere fact that the defendant municipalities have not consented to the project and have not entered into cooperation agreements does not prove a violation of constitutional rights of anyone.

In Palmer v. Thompson, 403 U.S. 217, 91 S.Ct. 1940, 29 L.Ed.2d 438 (1971), the city of Jackson, Mississippi, decided to cease operation of segregated municipal swimming pools that it had been operating. The Supreme Court found there was clearly state action in the closing of the pools, but could find no denial of equal protection of the law. The Court held that a neutral policy which had a greater impact on a minority was not invalid on that basis.

The minority groups in Palmer relied heavily on the motives of those who closed the swimming pools; however, the Supreme Court was willing to look only to the impact of the action taken, not to motives.

In the present case the failure of the suburbs to provide low-rent housing affected alike both low-income blacks and whites. There may have been a greater impact on the blacks, but that, under Palmer, is not sufficient to establish a constitutional violation.

In Lindsey v. Normet, 405 U.S. 56, 92 S.Ct. 862, 31 L.Ed.2d 36 (1972), the Court held that no one has a constitutional right to adequate housing. Since a person has no right to public housing in his own city, it follows that he has no such right in a municipality in which he does not reside.

See also Ranjel v. City of Lansing, 417 F.2d 321 (6th Cir. 1969), cert. denied, 397 U.S. 980, 90 S.Ct. 1105, 25 L.Ed.2d 390 rehearing denied, 397 U.S. 1059, 90 S.Ct. 1352, 25 L.Ed.2d 680 (1970), on neutral action of referendum.

In Citizens Comm. for Faraday Wood v. Lindsay, 362 F.Supp. 651 (S.D.N.Y.1973), suit was filed against the City of New York, the Housing and Development Administration of the City (HDA), and John Lindsay, then Mayor of the City, alleging racial discrimination by refusing to approve an application for construction of a housing project in violation of Section 1983 and other civil rights statutes, as well as in violation of the Fair Housing Law, Title VIII of the Civil Rights Act of 1968, 42 U.S.C. § 3601 et seq. The District Court followed City of Kenosha v. Bruno, 412 U.S. 507, 93 S.Ct. 2222, 37 L.Ed.2d 109 (1973), holding that the Court has jurisdiction under 28 U.S.C. § 1343 of the individual defendants only and not of the City nor HDA. The Court, in considering its jurisdiction under the Federal Housing Law and Title VIII of the Civil Rights Act of 1968, held that in the denial of the application for housing, which similarly affected whites as well as blacks, there was no racial discrimination. In so holding the Court relied on Palmer and Valtierra, supra.

It is significant that the Court in Citizens Comm, for Faraday Wood specifically rejected the decision of the single Judge in the present case. The Court in that case said:

To the extent that other cases, including most recently Mahaley v. Cuyahoga Metropolitan Housing Authority, 355 F.Supp. 1245 (N.D.Ohio 1973), take a contrary position, this Court must respectfully disagree. In view of Valtierra and Palmer, it appears that in housing, for a racially discriminatory effect to be found, there must be some showing that a policy or activity which has a racially discriminatory effect results from a prior pattern of discrimination or that such policies affect only racial minorities. To the extent that other courts have carried the idea of “discriminatory effect” in the housing field further, this Court rejects the position they have espoused while again noting that the decisions turned on their individual facts. To hold that any action or failure to act is unconstitutional because it has an adverse effect on minorities, even though it affects members of the majority as well — albeit to a lesser degree — would be carrying the idea of discriminatory effect too far. Under such an approach a governmental unit could never stop a program for entirely sound reasons even at an early talking stage if it would deprive minorities of something they would have had if the program came to fruition. (362 F.Supp. at 659).

The Court further stated:

Nor every state action which has some adverse effect on minority persons is unconstitutional or in violation of a statute. For example, it must be shown that the effect of the action under challenge falls more heavily on minority group members than on the population as a whole. Or it must be shown that the discriminatory effect results from a prior pattern or practice of discrimination. (362 F.Supp. at 657).

The single Judge made no findings of a prior pattern or practice of discrimination of the suburbs against racial minorities, or that the failure or refusal of the municipalities to sign cooperation agreements affected racial minorities in Cleveland any differently than other ethnic groups living in that inner city. The Judge has not pointed out any evidence of purposeful discrimination of each of the municipalities against racial minorities.

There was not a scintilla of evidence that any representative of CMHA or of the plaintiffs ever requested an appearance or appeared before the city councils of any of the defendant municipalities (the city councils being their governing bodies) to request that they or any of them approve a low-rent housing project or that they enter into a cooperation agreement.

The governing bodies of the five municipal defendants were never given an opportunity to pass upon the matter; nevertheless they were charged with discrimination against blacks for failure to take affirmative action.⁴

Plaintiffs’ remedy, if they were dissatisfied with the decision of the three-judge panel, was to appeal to the Supreme Court. That decision was binding on the single Judge and it could not be collaterally attacked.⁵

The judgment of the District Court is reversed and the cause is remanded for dismissal of the complaints.

1 . 42 U.S.C. § 1415(7) (a) (i), (ii), and (b) (i) provide:

(7) In recognition that there should be local determination of the need for low-rent housing to meet needs not being adequately met by private enterprise—

(a) The Authority shall not make any contract with a' public housing agency for preliminary loans (all of which shall be repaid out of any moneys which become available to such agency for the development of the projects involved) for surveys and planning in respect to any low-rent housing projects initiated after March 1, 1949, (i) unless the governing body of the locality involved has by resolution approved the application of the public housing agency for such preliminary loan; and (ii) unless the public housing agency has demonstrated to the satisfaction of the Authority that there is a need for such low-rent housing which is not being met by private enterprise; and

(b) The Authority shall not make any contract for loans (other than preliminary loans) or for annual contributions pursuant to this chapter with respect to any low-rent housing project initiated after-March 1, 1949, (i) unless the governing body of the locality involved has entered into an agreement with the public housing agency providing for the local cooperation required by the Authority pursuant to this chapter; . . . .

2 . It is significant that no resident of any of the five municipalities has joined with the plaintiffs in this action.

There are some 56 cities and villages in Cuyahoga County within the jurisdiction of CMHA. It has' built low-rent housing only in Cleveland and East Cleveland under cooperation agreements duly authorized. It has cooperation agreements with two other municipalities in the county. The plaintiffs have selected only the five municipal defendants out of remaining suburbs for low-rent housing projects, and primarily for the benefit of residents of Cleveland. It is of course unusual for residents of one municipality to bring an action in a Federal Court to force low-rent housing by judicial fiat on other municipalities, in which they do not reside, and which may not either need or want low-rent housing.

3 . Our colleague, in his dissent, asserts that this clear and definite order is merely “tentative” and “interlocutory”, and that we really had no jurisdiction to hear this appeal.

This issue was laid to rest when shortly after the appeal had been filed we unanimously entered the following Order denying appellee’s motion to dismiss the appeal:

“Before Weick, Edwards and Peek, Circuit Judges.

“Upon consideration it is ORDERED that the motion to dismiss the appeal be and it is hereby denied. Gillespie v. United States Steel Corp., 379 U.S. 148 [85 S.Ct. 308, 13 L.Ed.2d 199] (1964).

“It is further ordered that this appeal be advanced for hearing before the panel, on its merits, during the final week of the February, 1974 Session of this Court.

“Appellants shall file their brief and appendix within twenty (20) days after the date of entry hereof, and appellees shall file their brief within twenty (20) days thereafter.”

After oral argument and submission, our colleague unilaterally brought up the matter again in his dissenting opinion. The question of jurisdiction, however, can be raised at any time.

Gillespie indicated that an appellate court should give consideration to four factors in determining whether an order of a lower court is “final” within the meaning of 28 U. S.C. § 1291:

1— —Whether an order is final depends on whether it has been given a “practical rather than technical construction,” Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).

2— Whether an order is final depends on whether the issue appealed is fundamental to the further conduct of the litigation in the lower court.

3— Whether an order is final depends on whether the parties will be put to additional expenses if the appealed issue is not resolved by the appellate court.

4— In eases where the issue of finality is close or marginal, the court of appeals should find in favor of finality.

Applying these factors to the present case, it is clear that the appeal of the five municipalities should not be dismissed for lack of jurisdiction under 28 U.S.C. § 1291. The order from which the appeal was taken was indeed final.

First, as to practical effect, while the District Court did not at that time actually order the five municipalities to sign a cooperation agreement, it did hold that the municipal defendants had to show a “compelling necessity” why they had not signed. The Court went on to reject all the reasons which the defendants might possibly advance as meeting that “compelling necessity” test.

Second, there can be no doubt that the issue of whether the municipalities have violated 42 U.S.C. § 1983 by their failure to determine their need for public housing and to sign cooperation agreements, is fundamental to the further conduct of this case. Similarly, the question of jurisdiction of the District Court over the municipalities and CMHA and over the subject matter is also fundamental to the disposition of the case.

Third, the great inconvenience and the cost and expense of a second trial is all-important to the municipalities, particularly since the trial record contains all of the evidence necessary for this Court to make a full and complete disposition of all of the issues in this case. The single Judge did not need any additional evidence to make his findings of constitutional violation and remedial order, all of which were prepared and filed almost contemporaneously with the order of the three-Judge Court. All that was necessary to be done was for CMHA to prepare a plan for the low cost public housing in the five municipalities, for the Cleveland residents, and for the municipalities then to approve it or to show good cause for not doing so. The consent of the governing bodies of the municipalities, which is required by the Act as a condition precedent for the housing loans, is completely abrogated by the Order. This consent requirement was held mandatory by our decision in Cuyahoga Metropolitan Housing Authority v. Harmody, 474 F.2d 1102 (6th Cir. 1973). In our opinion, the findings of discrimination by the Court are not supported by substantial evidence and are clearly erroneous.

Fourth, the issue of finality in the present case is not even close. In Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974), the Supreme Court recently reaffirmed the basic teachings of Gillespie:

“This Court has been inclined to follow a ‘pragmatic approach’ to the question of finality. Brown Shoe Co. v. United States, 370 U.S. 294, 306 [82 S.Ct. 1502, 8 L.Ed.2d 510] (1962). And we have said that a final decision, within the meaning of § 1291, ‘does not necessarily mean the last order possible to be made in a case.’ Gillespie v. United States Steel Corp., 379 U.S. 148, 152 [85 S.Ct. 308, 13 L.Ed.2d 199] (1964); see Cohen v. Beneficial Loan Corp., 337 U.S. 541, 545 [69 S.Ct. 1221, 93 L.Ed. 1528] (1949).” (Fn. 28, at 722, 94 S.Ct. at p. 2022.

4 . There was evidence that the Director of CMHA had met with the Mayors of Euclid, Garfield Heights, and Westlake. These meetings were of an informational nature. No request was made for the municipalities to approve a- housing project or to sign a cooperation agreement. The CMHA Director did not even meet on an informal basis with the Mayors of Parma and Solon. CMHA, before and after the filing of the suits, addressed informational letters to the Mayors and City Managers of all of the municipalities or villages, sometimes enclosing pamphlets relative to housing. The Mayors or Managers of the municipalities are not the “governing bodies” of the municipalities.

5 . The first sentence in the dissent reads :

“This case is a civil rights case attacking the growing evil of apartheid in urban America.”

Under our constitutional form of Government no such evil can ever exist in America.

We think, however, that the remedy for social change lies with Congress rather than with the courts. We have no discretion but to obey all valid laws enacted by Congress, and to follow all applicable decisions of the Supreme Court.