Carson v. Pierce

• Citation: 546 F. Supp. 80
• Decision Date: 30 June 1982
• Docket Number: No. 81-605C(3).,81-605C(3).
• Parties: James CARSON and Bertha Carson, etc., et al., Plaintiffs, v. Samuel R. PIERCE, Jr., Secretary, HUD, et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

546 F. Supp. 80

James CARSON and Bertha Carson, etc., et al., Plaintiffs, v. Samuel R. PIERCE, Jr., Secretary, HUD, et al., Defendants.

No. 81-605C(3).

United States District Court, E. D. Missouri, E. D.

June 30, 1982.

David Lambert, National Center for Youth Law, San Francisco, Cal., Jim Eggleston, Sanrafael, Cal., Adrienne E. Volenik, Howard & Volenik, St. Louis, Mo., for plaintiffs.

G. Carroll Stribling, Jr., Fordyce & Mayne, Clayton, Mo., Wesley D. Wedemeyer, Asst. U. S. Atty., St. Louis, Mo., Keith M. Werhan, Mary E. Goetten, Dept. of Justice, Civ. Div., Washington, D. C., for defendants.

MEMORANDUM

FILIPPINE, District Judge.

This matter is before the Court on two motions: (1) the motion of defendants, Spanish Lake Associates, Stephen P. Hayman, Alan J. Hayman, and Hayman Management Company (all of whom will be referred to hereinafter as the non-federal defendants), to dismiss for failure to state a claim and/or for lack of jurisdiction over the subject matter; and (2) the motion of the federal defendants to dismiss, or, in the alternative, for summary judgment.

The named individual plaintiffs in this action are James Carson, Bertha Carson, and Ruthie Royster, all residents of Lake in the Woods Apartments. The Carsons and Ms. Royster each have three minor children. Facing eviction because of the policy of defendant Hayman Management Co., the company charged with managing Lake in the Woods Apartments, to limit occupancy in Lake in the Woods Apartments to families with not more than two children, these plaintiffs filed suit in this Court seeking relief on behalf of themselves, their minor children, and all others similarly situated. Also named as a plaintiff is The Greater St. Louis Committee for Freedom of Residence, Inc. (Freedom of Residence).

Plaintiffs seek declaratory and injunctive relief prohibiting the allegedly unlawful discrimination against families with children by defendants Spanish Lake Associates, owners of the Lake in the Woods Apartments, and Hayman Management Co. They also seek to compel the Department of Housing and Urban Development (HUD) "to enforce its statutory obligation to prevent discrimination against families with children in multi-family housing projects with federally insured mortgages" (plaintiffs' complaint, ¶ 3). Also named as defendants are Neil Pierce, the Secretary of HUD; Harry Sharrott, Acting Regional Administrator for Region VII of HUD; Johnny Bullock, Jr., Area Manager for the St. Louis Area of Region VII of HUD, all in their official capacity; and Stephen P. Hayman and Alan J. Hayman, managing partners of Spanish Lake Associates.

The facts as alleged by plaintiffs are as follows:

The individual named plaintiffs live in Lake in the Woods Apartments, a development constructed with the aid of federal mortgage insurance. There are two sections of the National Housing Act which provide for such federal mortgage insurance for rental housing in order to assist the private housing industry in providing housing suitable for families at a reasonable cost. These are section 207, 12 U.S.C. § 1713, and section 221, 12 U.S.C. § 1715l. Lake in the Woods Apartments received its federal mortgage insurance under § 221(d)(4). The Secretary of HUD has promulgated a regulation under § 221(d)(4) requiring mortgagors who receive insurance pursuant to that provision to certify under oath that "in selecting tenants for the project covered by the mortgage," he will not discriminate against any family by reason of the fact that there are children in the family." 24 C.F.R. § 221.536(a). On December 4, 1978, defendants Spanish Lake Associates entered into a required regulatory agreement with the Secretary of HUD, providing that "owners shall not in selecting tenants discriminate against any person or persons by reason of the fact that there are children in the family." Regulatory Agreement for Multi-Family Housing Projects, paragraph 5(a).

The Carsons and their three minor children moved into a three-bedroom apartment in the Lake in the Woods complex in August, 1979, under a one-year lease. During July, 1980, Mr. Carson received notice that he and his family would no longer be able to occupy the apartment when his current lease expired because the Hayman Management Company's policy was to deny occupancy to families with more than two children.

Ms. Royster and her three minor children also moved into a three-bedroom apartment in the Lake in the Woods complex in August, 1979. In July 1980, Ms. Royster received a notice identical to that received by Mr. Carson.

Since July, 1980, Freedom of Residence has submitted written complaints to defendants Bullock and HUD regarding the allegedly discriminatory policies of Spanish Lake Associates. Plaintiffs allege that in a letter to Freedom of Residence dated August 29, 1980, Bullock concluded that the policy of Spanish Lake Associates did not violate the National Housing Act because it did not prohibit children entirely. On October 10, 1980, plaintiffs' attorney requested in writing a modification of Bullock's ruling contained in his letter dated August 29, 1980. Defendant Sharrott advised plaintiffs' attorney that his request had been referred to HUD's Washington, D. C. office. On December 12, 1981, plaintiffs' attorney again requested in writing to Sharrott modification of Bullock's ruling. No response has been forthcoming from HUD.

The essence of the relief sought by plaintiffs is that the Court (1) declare that 12 U.S.C. § 1713(b) "prohibits any and all discrimination against families with children in rental projects with federal mortgage insurance except that mandated by applicable government health, safety and occupancy codes" and that the defendants have violated this provision; (2) prohibit the non-federal defendants from maintaining and enforcing occupancy standards more restrictive than required by government health, safety, and occupancy codes; (3) prohibit the non-federal defendants from denying occupancy to families whose occupancy is or would be consistent with such codes; (4) require the non-federal defendants to renew the leases of the Carsons and Ms. Royster; (5) compel HUD "to adopt regulations pursuant to the National Housing Act prohibiting all discrimination against families with children in rental projects with federal mortgage insurance except that mandated by applicable government health, safety and occupancy codes;" (6) compel HUD "to take agency action to enforce compliance with Federal law prohibiting discrimination against families with children in rental projects with federal mortgage insurance;" and (7) compel HUD to adopt regulations requiring the owners of rental projects with federal mortgage insurance to provide tenants whose leases are not renewed or prospective tenants who are denied admission with a written statement of the reasons for the denial of occupancy.

I. Non-federal defendants' motion to dismiss

The non-federal defendants move to dismiss on two grounds: (1) lack of subject matter jurisdiction and (2) failure to state a claim upon which relief can be granted. Plaintiffs advance three bases for their claims against the non-federal defendants: (1) an implied right of action under the National Housing Act, 12 U.S.C. § 1713(b); (2) breach of the regulatory agreement between the non-federal defendants and HUD, of which they view themselves as third-party beneficiaries; and (3) breach of their leases, which they allege incorporate the non-federal defendants' statutory and contractual obligations not to discriminate against families with children. Plaintiffs assert that this Court has jurisdiction over the first two claims pursuant to 28 U.S.C. §§ 1331 and 1337 and over the third claim under the doctrine of pendent jurisdiction.

A. Issue of Implied Private Right of Action under National Housing Act

Plaintiffs seek to bring a private cause of action against the non-federal defendants under the National Housing Act. The Court has jurisdiction over this claim pursuant to the general federal question jurisdictional provision, 28 U.S.C. § 1331, because the claim arises under federal law.¹ The Court's jurisdiction is not defeated by the possibility that a private cause of action does not exist under the Act. Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946).

Plaintiffs concede that the National Housing Act grants them no express private cause of action but maintain that it confers an implied private right of action.

Whether an act confers an implied private right of action is determined by ascertaining Congressional intent. Middle-sex County Sewerage Authority v. National Sea Clammers Ass'n, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981); California v. Sierra Club, 451 U.S. 287, 293, 101 S.Ct. 1775, 1778-79, 68 L.Ed.2d 101 (1981); Universities Research Ass'n. v. Coutu, 450 U.S. 754, 770, 101 S.Ct. 1451, 1461-62, 67 L.Ed.2d 662 (1981); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 15-16, 100 S.Ct. 242, 245, 62 L.Ed.2d 146 (1979). The criteria used to ferret out this intent were set forth in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). The four criteria are (1) whether plaintiff is a member of the class for whose special benefit the statute was enacted, or phrased another way, whether "the statute creates a federal right in favor of the plaintiff." Id. at 78, 95 S.Ct. at 2088; (2) whether there is an indication of legislative intent to create or deny such a remedy; (3) whether it is consistent with the underlying purposes of the legislation to imply such a remedy; and (4) whether the cause of action is "one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law." Id. These four factors are not entitled to equal weight; where the language of the statute and the legislative history do not evince an intent to create a private...