Cervantes v. Guerra

• Decision Date: 13 July 1981
• Docket Number: No. 80-1294,80-1294
• Citation: 651 F.2d 974
• Parties: Enrique CERVANTES, et al., Plaintiffs-Appellees, v. Ramiro GUERRA, et al., Defendants-Appellants. . Unit A
• Court: U.S. Court of Appeals — Fifth Circuit

Page 974

651 F.2d 974

Enrique CERVANTES, et al., Plaintiffs-Appellees, v. Ramiro GUERRA, et al., Defendants-Appellants.

No. 80-1294.

United States Court of Appeals, Fifth Circuit.

Unit A

July 13, 1981.

Atlas, Hall, Schwarz, Mills, Gurwitz & Bland, Travis Hiester, McAllen, Tex., for defendants-appellants.

George P. Powell, Edinburg, Tex., Linda Yanez, Brownsville, Tex., for plaintiffs-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before BROWN, WISDOM and RANDALL, Circuit Judges.

WISDOM, Circuit Judge:

The primary defendant in this case, the Hidalgo County Community Action Agency, Inc., a nonprofit corporation organized under Texas law, receives federal money under the Economic Opportunity Act of 1964, 42 U.S.C. §§ 2701-2995d (1976 & Supp. III 1979). The corporation's bylaws exclude aliens from serving on its board of directors or voting for members of the board. Plaintiffs, two legally resident aliens, challenge those bylaws as inconsistent with the Economic Opportunity Act, regulations adopted to carry out the Act, and the equal protection clause. The district court agreed with all three contentions. We reverse.

I.

The Economic Opportunity Act of 1964 is a comprehensive attempt to reduce the causes of poverty in the United States. Title II of that statute, codified at 42 U.S.C. §§ 2781-2837, provides for federal grants to organizations that qualify as "community action agencies" (CAA's). A public or private nonprofit organization will qualify as a community action agency if it is specially designated as such by state or local authorities, its internal structure meets certain statutory and administrative requirements, and if the Community Services Administration (CSA) determines it to be capable of planning and operating "community action programs" programs "having a measurable and potentially major impact on causes of poverty in the community...." § 210(a), 42 U.S.C. § 2790(a). ¹ The CSA, successor to the former Office of Economic Opportunity, administers the statute and is empowered to promulgate appropriate regulations. §§ 601, 602(n), 42 U.S.C. §§ 2941, 2942(n).

One of the main goals of Title II is to promote "the maximum feasible participation of residents of the areas and members of the groups served (by each CAA), so as to best stimulate and take full advantage of (their) capabilities for self-advancement and assure that (the) programs and projects are otherwise available to and widely utilized by their intended beneficiaries". § 201(a)(4), 42 U.S.C. § 2781(a)(4). The statute therefore requires private CAA's to be managed by a "governing board", having at least one-third of its members "persons chosen in accordance with democratic selection procedures adequate to assure that they are representative of the poor in the area served", one-third public officials or their representatives, and the remainder members of organized private interest groups in the community. § 211(b), 42 U.S.C. § 2791(b). ²

The facts in this case are almost all stipulated. Hidalgo County, Texas, is one of the poorest counties in the United States. Between 48 and 50 percent of its approximately 200,000 residents qualify as poor under CSA standards, and a CAA serving that county can expect initially to receive at least five to ten million dollars in public funds. The county's experience with community action agencies has not been a happy one. The first CAA to serve Hidalgo County ceased to function after it was adjudicated bankrupt and after its executive director was convicted of misuse of public funds events attributable in part to the failure of its board of directors adequately to oversee its operations. After that debacle, the Commissioners' Court of Hidalgo County, the county's legislative body, appointed a task force to organize a new CAA. In August 1979, that task force incorporated the Hidalgo County Community Action Agency (HCCAA) for that purpose and, in accordance with CSA regulations, served as its interim board of directors until a board could be selected in compliance with the general statutory mandate. 45 C.F.R. § 1062.200-3(c) (1980). ³ The interim board prepared bylaws for HCCAA providing for a board of fifteen members, five to be elected as representatives of the poor of Hidalgo County from five specified districts. The bylaws required the representatives of the poor to be poor themselves or nominated by someone who is poor. One of the bylaws provided that no one other than a United States citizen would be eligible either to serve on the board or to vote to select board members.

The Commissioners' Court formally designated HCCOA as the CAA for Hidalgo County on September 5, 1979. On the same day the interim board scheduled elections on September 8 to choose the five representatives of the poor. Almost simultaneously, plaintiffs Cervantes and Meza filed this suit under 42 U.S.C. § 1983 (1976) to enjoin the election. ⁴ Both plaintiffs are aliens lawfully admitted to the United States for permanent residence, and both live in Hidalgo County. Both sought to be nominated for the positions on HCCAA's board reserved for representatives of the poor and to vote in the election to select those representatives. They were denied those rights because of their alienage. In this suit, they assert that the exclusion of aliens from eligibility to vote and to serve on the board: (1) violates the "democratic selection procedures/representative of the poor" requirement of § 211(b) and certain CSA regulations, and therefore conflicts with the supremacy clause; and (2) violates the equal protection clause. ⁵ Named as defendants were the five individual members of the Hidalgo County Commissioners' Court, Hidalgo County itself, and HCCAA. The CSA was not made a party.

After the district court refused to enter a preliminary injunction, the election was held as scheduled on September 8. On February 25, 1980, the district court entered judgment in favor of the plaintiffs: the exclusion of aliens from voting for and serving on HCCAA's board violated the equal protection clause, as well as § 211(b) and pertinent regulations. The court therefore entered an order declaring the bylaw void and setting aside the results of the election of September 8. From this, all of the defendants but HCCAA appeal.

II.

Our jural world distinguishes behavior attributable to the federal government from behavior attributable to a state government and from behavior of private persons. CAA's do not fit well into that scheme, for their nature combines federal, state, and private genes. Their structure is regulated by the CSA, and the federal government may provide eighty percent or more of their budgets. State and local governments must formally designate them before they may receive federal funds. Local government officials make up one-third of their governing boards. Yet no level of government supervises their day-to-day operations, and their very purpose is to function as autonomous bodies responsive to the poor in the community served. ⁶ Although constitutional and statutory challenges to actions by CAA's are not new to the federal courts, their peculiarly hybrid nature has left many problems unresolved. It has not been settled whether and when they may be treated as state or federal instrumentalities to which constitutional guarantees are applicable. See Robison v. Wicheta Falls and North Texas Community Action Corp., 5th Cir. 1975, 507 F.2d 245, 250-51. See also Ginn v. Mathews, 9th Cir. 1976, 533 F.2d 477; Mathis v. Opportunities Industrialization Centers, Inc., 9th Cir. 1976, 545 F.2d 97. ⁷ Even assuming that state action can be found here, it is not clear whether a § 1983 action against HCCAA to void a discriminatory bylaw is the correct vehicle for review; it may be that the plaintiffs' only proper recourse is a suit against the CSA to enjoin it from funding HCCAA unless it rescinds the bylaw. ⁸ On the other hand, even absent state action, it may be that the plaintiffs could imply a cause of action against HCCAA from the Economic Opportunity Act on their statutory claim. ⁹

Only some of these issues were raised by the defendants below, and none was explicitly treated by the district court. Because of the way we view the merits and because none of these issues is jurisdictional, we need not address them. ¹⁰ It is fair to assume without deciding that the adoption of the bylaw was state action within the meaning of the fourteenth amendment and that a § 1983 action against HCCAA is a proper way to contest the consistency of that bylaw with the underlying statute and the equal protection clause. We reverse on the ground that the bylaw is not forbidden by the Economic Opportunity Act or CSA regulations, and does not violate the equal protection clause.

A.

The CSA's regulations do not elaborate on the meaning of the "democratic selection procedures/representative of the poor" requirement of § 211(b); they expressly leave the formulation of voting procedures and eligibility requirements to the founders of each CAA. ¹¹ The district court relied on 45 C.F.R. § 1062.30, which reads in relevant part:

(a) A CAA must also be free, with regard to the community action program, from any rules or restrictions that would prevent:

....

(4) Free participation in the program by persons who are currently living in the community, whether or not they qualify as legal or permanent residents.

This regulation has no bearing on eligibility to serve on the governing board or to vote for board members, however, for it applies only to participation in "community action programs". That is a term of art, specifically defined by § 210(a), 42 U.S.C. § 2790(a). A "program" is a project administered by a CAA; the term does not include the management of the CAA itself. For example, if a CAA operates a legal services program, this regulation forbids it from refusing services to a resident merely because he is an alien. But the...