Sapp v. Hardy, Civ. A. No. 2433.

• Decision Date: 30 March 1962
• Docket Number: Civ. A. No. 2433.
• Citation: 204 F. Supp. 602
• Parties: David SAPP, individually and as co-partner trading as Dorset Apartments; Brodney Corp., a Delaware corporation, Plaintiffs, v. Neal J. HARDY, Commissioner, Federal Housing Administration; Henry M. Winchester, Jr., District Director, Federal Housing Administration; and Kevy Kaiserman, Defendants.
• Court: U.S. District Court — District of Delaware

204 F. Supp. 602

David SAPP, individually and as co-partner trading as Dorset Apartments; Brodney Corp., a Delaware corporation, Plaintiffs, v. Neal J. HARDY, Commissioner, Federal Housing Administration; Henry M. Winchester, Jr., District Director, Federal Housing Administration; and Kevy Kaiserman, Defendants.

Civ. A. No. 2433.

United States District Court D. Delaware.

March 30, 1962.

H. B. Rubenstein and Frederick Knecht, Jr. (of Leshem & Rubenstein), Wilmington, Del., Michael H. Egnal, Philadelphia, Pa., for plaintiffs.

Stanley C. Lowicki, Asst. U. S. Atty., for defendants Hardy and Winchester.

Harry Rubenstein and Alfred Fraczkowski, Wilmington, Del., for defendant Kaiserman.

RODNEY, Senior District Judge.

This is a motion under Rule 12(b) (1), F.R.Civ.P., 28 U.S.C.A., to dismiss the action because of the alleged lack of jurisdiction in the Court of the subject matter of the action.

The action generally seeks to prevent the consummation of a commitment for the insurance of a mortgage by the Federal Housing Administration and covering an apartment house proposed to be erected at 2401 Pennsylvania Avenue in Wilmington, Delaware.

The individual plaintiff is described as a citizen of the United States and as co-owner of the "Dorset," an apartment house in Wilmington. The corporate plaintiff is also alleged to be a citizen of the United States and the owner of another apartment house in Wilmington known as "1401."

The defendant Neal J. Hardy is sued as Commissioner of the Federal Housing Administration and Henry M. Winchester, Jr., as District Director of that agency, and both are sued individually. Kevy Kaiserman is designated as sponsor of the project.

From the complaint it would seem that back in 1958 requests for commitments were made to the former local District Director of the Federal Housing Administration on behalf of both of the present plaintiffs and by those then interested in the site at 2401 Pennsylvania Avenue. These requests were of a formal or informal nature. No definite commitment was then made and the present plaintiffs erected their respective buildings by conventional methods. A definite commitment is now contemplated in connection with the location 2401 Pennsylvania Avenue and is now imminent, and the purpose of this suit is to prevent its consummation.

The present complainants contend that the proposed plan for a building at 2401 is not economically sound and that there is no need for such a building in the locality, that the commitment for federal aid for such building is therefore without statutory authority, arbitrary, an abuse of discretion and contrary to the rights of the plaintiffs.

The defendants have moved to dismiss the action for lack of jurisdiction over the subject matter which is another way of saying that the plaintiffs have no standing to bring the action and that consequently there is no matter upon which the Court can act.

The plaintiffs state that the jurisdiction of the Court and the right of the plaintiffs to sue may be found in the National Housing Act, 12 U.S.C.A. § 1701 et seq., in the Administrative Procedure Act, 5 U.S.C.A. § 1001 et seq., and in the general equity jurisdiction of the Court.

1. Reversing the stated order, we first consider whether there is any general equity jurisdiction as a basis of the present plaintiffs' claim. It is clear that the Federal Housing Administration is an agency of the Executive Department of the Government, created as such by Congress. There is to me no apparent or inherent right of general review or control by the Judicial Department of the Government of the Executive Department unless such right of review or control may be gathered from some appropriate legislation.

Where Congress has created an administrative board, the Supreme Court has said:

"All constitutional questions aside, it is for Congress to determine how the rights which it creates shall be enforced."¹

The general equity power inherent in a district court does not itself confer jurisdiction, but can implement jurisdiction otherwise existing and allows the equitable molding of necessary remedies and procedures. The jurisdiction of the court as such exists only as granted by some law of the United States. I think no jurisdiction exists in the present case by virtue of the so-called "general equity power" itself, but this inherent power may be used here if the suit complies with the general grant under 28 U.S.C. § 1331 over a "case arising under the Constitution, laws or treaties of the United States." However, under this section there must be some person entitled to a remedy at the hands of the court and entitled to invoke the equity power of the court. This legal right or standing of a party must be shown before a "case" is presented and the equitable jurisdiction of this Court can come into play.² This right or standing of the present plaintiffs will now be considered.

By amendment to the complaint, the plaintiffs have deleted the designation of the plaintiffs as "taxpayers" and substituted the word "citizens." The purpose of the amendment is not clear. In Frothingham v. Mellon, 262 U.S. 447, 487, 43 S.Ct. 597, 67 L.Ed. 1078, the Court held the interest of a federal taxpayer was too remote, indeterminable and uncertain to give him standing to attack the constitutionality of the statute then considered. The standing of a taxpayer in cases similar to the present one is subject to the same limitations as the cited case, and it would seem that a mere citizen has even less standing than a taxpayer.³

I, therefore, conclude that the present plaintiffs have no standing to maintain the action as taxpayers or citizens.

The only discernible claimed standing to maintain the present action would seem from the complaint to arise from the fact that as owners of other apartment houses in the general locality plaintiffs would suffer some potential loss of income and patronage if the proposed mortgage on 2401 Pennsylvania Avenue becomes effective. It will be borne in mind, too, that there is no suffering of a present loss but only a possibility of a future loss. It is not certain that any tenant of the apartment houses of the plaintiffs would leave his present location or that, when the new building is completed, the then demand for accommodations would not require all of the apartments.

The fact that plaintiffs allege they will suffer financial loss because of the competition from defendant's building does not satisfy the rules of standing to sue. In Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374, jurisdiction was denied over a suit by electric power companies to enjoin the allegedly illegal and unconstitutional loans by the Secretary of Interior to several municipal power companies. The Court denied plaintiff's standing to bring the suit because they had no legally recognized right to be free from competition of a legal character and their losses were therefore damnum absque injuria.

A very similar case arose recently in the District of Columbia in which ...