664 F.2d 1210 (4th Cir. 1981), 80-1253, Perry v. Housing Authority of City of Charleston

Docket Nº:80-1253.
Citation:664 F.2d 1210
Party Name:Geraldine PERRY, Individually and on behalf of all others similarly situated, Appellant, v. The HOUSING AUTHORITY OF the CITY OF CHARLESTON, a corporate body politic; W. F. Stack, Individually and in his Official Capacity as Executive Director of the Housing Authority of the City of Charleston; and Jack C. Miller; Wilmot J. Fraser; Viola M. Smalls;
Case Date:November 24, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit

Page 1210

664 F.2d 1210 (4th Cir. 1981)

Geraldine PERRY, Individually and on behalf of all others

similarly situated, Appellant,



body politic; W. F. Stack, Individually and in his Official

Capacity as Executive Director of the Housing Authority of

the City of Charleston; and Jack C. Miller; Wilmot J.

Fraser; Viola M. Smalls; Max Kirshstein; Raymond P. McClain;

James J. French; and Larry B. James, Individually and in

their Official Capacities as members of the Housing

Authority of the City of Charleston, Appellees.

National Housing Law Project and National Tenants

Organization, Amici Curiae.

No. 80-1253.

United States Court of Appeals, Fourth Circuit

November 24, 1981

Argued Aug. 6, 1981.

Catherine M. Bishop, National Housing Law Project, Berkeley, Cal., for Amici Curiae in Support of appellant.

Robert N. Rosen, Asst. Corp. Council, City of Charleston, Stephen T. Schachte, Charleston, S. C., for appellees.

Maureen J. Feran, Jay Rosen, Neighborhood Legal Assistance Program, Inc., Charleston, S. C., Richard J. Whitaker, Neighborhood Legal Assistance Program, Inc., Columbia, S. C., on brief, for appellants.

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Before RUSSELL, WIDENER and HALL, Circuit Judges.

DONALD RUSSELL, Circuit Judge:

This is an appeal by the plaintiffs/appellants from a decision of the district court dismissing their suit against the defendants/appellees for failure to state a federal cause of action. 1 We affirm.

The defendant Housing Authority of the City of Charleston ("HACC") operates a low-income housing project in North Charleston, South Carolina known as the George Legare Homes. The project consists of over 600 units, 552 of which were rented as of September 1978 when this action was filed. HACC, a municipal corporation, was created in 1934 and exists by virtue of the South Carolina Housing Authorities Law, S.C.Code Ann. § 31-3-10 et seq. (1976).

Plaintiffs, four families residing in George Legare Homes, 2 filed this action in 1978 alleging that the state of disrepair at George Legare posed "major and substantial hazards to the health, safety, and welfare of Plaintiffs and the members of their class." The hazards included, inter alia, the use of lead-based paint, deterioration of the flooring and roofing, inadequate lighting and security patrols, and inadequate garbage pick-up contributing to infestation by rats and other vermin. Plaintiffs sought declaratory and injunctive relief, damages, and the establishment of a Tenants' Advisory Committee.

Plaintiffs claimed that HACC had received debt service and some operating expenses from Housing and Urban Development ("HUD") pursuant to the United States Housing Act of 1937, now codified at 42 U.S.C. 1437, et seq. and that HUD and HACC had entered into a consolidated Annual Contributions Contract. These facts, the plaintiffs asserted, supported jurisdiction under 28 U.S.C. §§ 1337, 2201, 2202, 1343(3) and 1331.

Upon defendants' motion to dismiss under Fed.R.Civ.P. 12(b), the district court agreed that there was jurisdiction under 28 U.S.C. § 1337, but held that no private cause of action existed under the United States Housing Act.

Plaintiffs on appeal contend that the district court erred in failing to find (1) that they have an implied right of action against HACC; (2) that they, as third-party beneficiaries of the contract between HAAC and HUD may sue; and (3) that they have alleged an action under 42 U.S.C. § 1983.

We consider first plaintiffs' contention that they have an implied right of action against HACC. Since 1975 the prevailing standard for judging whether there is a right of action under a statute not expressly providing one is stated in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). In that case the Supreme Court held that no private right of action was created by 18 U.S.C. § 610, a criminal statute which prohibited corporations from making campaign expenditures in connection with certain federal elections. Justice Brennan, speaking for the Court, set out four criteria for determining when a private right of action under a federal statute may be upheld:

First, is the plaintiff "one of the class for whose especial benefit the statute was enacted" ... that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? ... Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? ... And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate

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to infer a cause of action based solely on federal laws? 3

The Cort analysis has generally been followed, although the Court has favored a different but related approach in at least three cases. Compare California v. Sierra Club, --- U.S. ----, ---- - ----, 101 S.Ct. 1775, 1778-79, 68 L.Ed.2d 101 (1981); Cannon v. University of Chicago, 441 U.S. 677, 689-708, 99 S.Ct. 1946, 1953-63, 60 L.Ed.2d 560 (1979); Northwest Airlines, Inc. v. Transport Workers Union of America, AFL-CIO, --- U.S. ----, ---- - ----, 101 S.Ct. 1571, 1580-83, 67 L.Ed.2d 750 (1981); Piper v. Chris-Craft Industries, 430 U.S. 1, 37-41, 97 S.Ct. 926, 947-49, 51 L.Ed.2d 124 (1977); Texas Industries, Inc. v. Radcliff Materials, Inc., --- U.S. ----, ----, 101 S.Ct. 2061, 2066-67, 68 L.Ed.2d 500 (1981); Universities Research Association, Inc. v. Coutu, 450 U.S. 754, 771-773, 101 S.Ct. 1451, 1461-62, 67 L.Ed.2d 662 (1981) with Middlesex City Sewer Authority v. Sea Clammers Association, --- U.S. ---- - ----, 101 S.Ct. 2615, 2622-24, 69 L.Ed.2d 435 (1981); Transamerica Mortgage Advisor, Inc. (TAMA) v. Lewis, 444 U.S. 11, 15-16, 100 S.Ct. 242, 245, 62 L.Ed.2d 146 (1979); Touche Ross & Co. v. Reddington, 442 U.S. 560, 568, 99 S.Ct. 2479, 2485, 61 L.Ed.2d 82 (1979). Typical of the latter approach is Justice Rehnquist's declaration in Touche Ross that "our task is limited solely to determining whether Congress intended to create the private right of action asserted by (Securities Investors Protection Corporation) and the Trustee.... The ultimate question is one of congressional intent, not one of whether this Court thinks it can improve upon the statutory scheme that Congress enacted into law." 442 U.S. at 568, 578, 99 S.Ct. at 2485, 2490. See also TAMA, 444 U.S. at 15, 100 S.Ct. at 245. The Cort factors have also been criticized as giving courts too much flexibility and begging the question. Cannon, 441 U.S. at 740, 99 S.Ct. at 1980 (Powell, J. dissenting). 4 However, it makes no difference in this case whether we proceed under Cort or under, for example, TAMA or Touche Ross, for under either we would obtain the same result. 5

The plaintiffs, however, argue that they have met the four Cort requirements for an implied right of action. At the outset, they point to 42 U.S.C. §§ 1401, 1437d, 1441, 1441a as demonstrating that the low income tenants such as they are are the especial beneficiaries of the various housing acts and this fact, under this argument, meets the first requirement of Cort. Section 1437 states broadly by way of a preamble to the Housing Act that "(i)t is the policy of the United States to promote the general welfare of the Nation by employing its funds ... to assist the several states ... to remedy the unsafe and unsanitary housing conditions and the acute shortage of decent, safe and sanitary dwellings for families of low income ...." Section 1441, part of the Housing Act of 1949, makes a similar declaration of general purpose:

(T)he general welfare and security of the Nation and the health and living standards of its people require housing production and related community development sufficient to remedy the serious housing shortage, the elimination of substandard and other inadequate housing through the clearance of slums and blighted areas, and the realization as soon as feasible of the goal of a decent home

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and a suitable living environment for every American family. 6

Section 1437d(c) is a little more specific than § 1437. It provides:

Every contract for annual contributions shall provide that-the public housing agency shall comply with such procedures and requirements as the Secretary may prescribe to assure that sound management practices will be followed in the operation of the project, including requirements pertaining to the establishment of effective tenant-management relationships designed to assure that satisfactory standards of tenant security and project maintenance are formulated and that the public housing agent ... enforces those standards fully and effectively; .... 7

These broad declarations of policy as stated in §§ 1441 and 1437d(c), establish two things: First, the purpose of the legislation was to help the states; second, the purpose in helping the states was ultimately to benefit low income families. Thus the legislation had two beneficiaries-states as direct beneficiaries and low-income families as indirect beneficiaries. 8 While these provisions are too general to create substantive rights in the tenants or duties in the landlords, see Cannon, 441 U.S. at 690-93 n. 13, 99 S.Ct. at 1954...

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