COMMUNITY BROTH., ETC. v. LYNN REDEVEL. AUTH.

• Decision Date: 07 August 1981
• Docket Number: No. 76-4207-Z.,76-4207-Z.
• Citation: 523 F. Supp. 779
• Parties: COMMUNITY BROTHERHOOD OF LYNN, INC. and Aegis Corporation v. The LYNN REDEVELOPMENT AUTHORITY; Department of Housing and Urban Development of the United States of America; Moon Landrieu, in his capacity as Secretary of the Department of Housing and Urban Development of the United States of America; David L. Phillips, Frederick Latour, individually and in his capacity as past Chairman of the Governing Board of the Lynn Redevelopment Authority; Albert Waldron, individually and in his capacity as a Member of the Governing Board of the Lynn Redevelopment Authority; Thomas McIntyre, individually and in his capacity as a member and present Chairman of the Governing Board of the Lynn Redevelopment Authority; Irving Estrich, in his capacity as a Member of the Governing Board of the Lynn Redevelopment Authority; Edith Beaucamp, in her capacity as a Member of the Governing Board of the Lynn Redevelopment Authority.
• Court: U.S. District Court — District of Massachusetts

523 F. Supp. 779

COMMUNITY BROTHERHOOD OF LYNN, INC. and Aegis Corporation v. The LYNN REDEVELOPMENT AUTHORITY; Department of Housing and Urban Development of the United States of America; Moon Landrieu, in his capacity as Secretary of the Department of Housing and Urban Development of the United States of America; David L. Phillips, Frederick Latour, individually and in his capacity as past Chairman of the Governing Board of the Lynn Redevelopment Authority; Albert Waldron, individually and in his capacity as a Member of the Governing Board of the Lynn Redevelopment Authority; Thomas McIntyre, individually and in his capacity as a member and present Chairman of the Governing Board of the Lynn Redevelopment Authority; Irving Estrich, in his capacity as a Member of the Governing Board of the Lynn Redevelopment Authority; Edith Beaucamp, in her capacity as a Member of the Governing Board of the Lynn Redevelopment Authority.

No. 76-4207-Z.

United States District Court, D. Massachusetts.

August 7, 1981.

Joseph Book, Book & Banks, Richard J. Mercer, Boston, Mass., for plaintiff.

Charles H. Robson, Lynn, Mass., for Latour.

Philip L. Sisk, Lynn, Mass., for Waldron and McIntyre.

John N. Nestor, Lynn, Mass., for Lynn Redevelopment Authority.

Mary Boylan, Asst. U. S. Atty., Boston, Mass., Nancy M. Floreen, Alice Daniel, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., Ellen Perry Dole, HUD, Boston, Mass., for HUD.

Michael J. Barry, Lynn, Mass., for defendant Intervenor City of Lynn Dept. of Community Development.

MEMORANDUM OF DECISION

ZOBEL, District Judge.

Plaintiffs, community development organizations with memberships composed primarily of black residents of Lynn, Massachusetts, brought this action under 42 U.S.C. §§ 1981, 1982, 1983, 1985, 1986, 42 U.S.C. § 2000d, 42 U.S.C. §§ 3612, 3617 and under state law, against the Lynn Redevelopment Authority ("LRA"), various individual members of its governing board, the mayor and former mayor of the City of Lynn, ("the Lynn defendants") and against the Department of Housing and Urban Development of the United States ("HUD"). Plaintiffs claim that the Lynn defendants discriminated against them on the basis of race when they de-designated plaintiffs as site developers of an urban renewal parcel in Lynn. Plaintiffs also claim that HUD failed to take formal action against the LRA despite plaintiffs' complaints of discrimination, and that such failure violated Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. and the Civil Rights Act of 1871, 42 U.S.C. § 1986. The case is before me on HUD's motion to dismiss all claims remaining against it, or in the alternative, for summary judgment.¹

Plaintiffs seek substantial money damages from HUD as well as injunctive relief enjoining HUD from granting any federal financial assistance to the LRA, from allowing the continued de-designation of plaintiff, Aegis Corporation ("Aegis"), from failing to take "affirmative action" to end the LRA's alleged discriminatory policies and practices, and affirmatively requiring HUD to provide financing to the plaintiffs at 1975 rates for their original redevelopment project. Because I find that the statutory scheme established by Congress in Title VI does not create a private right of action by a funding applicant or beneficiary against a federal funding agency to obtain damages or mandatory injunctive relief, plaintiff's claims under Title VI must be dismissed.

Section 601 of Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d provides:

No person in the United States shall, on the ground of race, color or national origin, be excluded from participation in, be denied the benefits of, or be subject to discrimination under any program or activity receiving Federal financial assistance.

This section requires recipients of federal funding to comply with federal non-discrimination policies as a condition for receiving federal financial assistance. It creates a right in persons for whose benefit the provision was enacted not to be discriminated against, from which the Supreme Court has inferred a private right of action directly against the funding recipient whose actions are allegedly discriminatory. Regents of University of California v. Bakke, 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978); Allen v. Board of Elections, 393 U.S. 544, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969).

In a separate provision, section 602, 42 U.S.C. § 2000d-1, federal grant making agencies are authorized and directed to effectuate compliance with section 601, and, if necessary, to terminate funding or discontinue financial assistance to any program or activity "as to whom there has been an express finding on the record, after opportunity for hearing, of a failure to comply with such requirement." 42 U.S.C. § 2000d-1. With respect to programs funded or assisted by HUD, regulations have been promulgated detailing the procedures to be followed in investigations of complaints, requiring extensive conciliation attempts both by the Regional office and the assistant Secretary, and requiring 30 days notice to the appropriate House or Senate legislative committee before funds may be terminated. 42 U.S.C. § 2000d-1, 24 C.F.R. § 1.1 et seq., HUD Handbook 8000.2. Finally, section 603, 42 U.S.C. § 2000d-2, provides for judicial review of agency action taken pursuant to section 602.

The Supreme Court, in Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979) recently analyzed in detail the Congressional intent behind the enforcement schemes of Title VI and Title IX, and found that scheme to contemplate two enforcement pathways, each serving a separate purpose. First, Congress established an administrative mechanism for terminating federal financial support to institutions engaged in prohibited discrimination; termination was a "severe" remedy intended to avoid the use of federal resources to support discriminatory practices. Second, Congress wanted to provide individual citizens effective protection against those practices, including the ability to obtain individually tailored remedies, particularly where the violation was found to be an isolated instance rather than a reflection of a pervasive practice. Cannon, 441 U.S. at 704-706, 99 S.Ct. at 1961-1962.

With respect to the adminstrative enforcement provisions, "a beneficiary may trigger an agency investigation under section 602 and may, under appropriate circumstances, petition for review of an agency determination," N.A.A.C.P. v. Medical Center, Inc., 599 F.2d 1247, 1254 n.27 (3d Cir. 1979). But an individual plaintiff can do no more than compel the federal agency to comply with its own procedures for investigation; he cannot compel injunctive relief or funding termination. This very limit, the Supreme Court found, required the implication of the second pathway, a private remedy directly against the fund recipient. Cannon, supra, 706-707 n.41, 99 S.Ct. at 1962-1963 n.41.

Since the Cannon decision in 1979, two Courts of Appeals have squarely rejected the notion that Title VI (or the similarly structured Hill-Burton Act, 42 U.S.C. §§ 291 et seq.,) provided individuals with a private cause of action against the Secretary for any alleged failure to meet the Act's enforcement obligations. In N.A.A. C.P. v. Medical Center, Inc., 599 F.2d 1247 (3d Cir. 1979) the Third Circuit found that an action by a beneficiary against a recipient of federal funds "would allow the beneficiary to vindicate his section 601 rights without invoking the executive's power to terminate funds," because the trial court may, upon a finding of a section 601 violation, order the recipient to cease the discriminatory practice. The Court continued:

It follows that the beneficiary may not sue the administrative agency under section 601. If the beneficiary were allowed to do so, it would be able to circumvent the limitations of sections 602 and 603, and would be in a position to, in essence, compel funding termination — which is an impermissible result. This conclusion is in harmony with our analysis of the legislative scheme. It does no harm to beneficiaries' rights, as complete relief can be awarded without the agency being a party to the private suit, and complete discovery can be undertaken, since the agency has no more relevant information to impart than does the funding recipient, who is a party. Id. at 1254 n.27.

Recently, relying on both Cannon and N.A. A.C.P. and finding a private right of action against the Secretary to be "inconsistent" with the statutory schemes of enforcement in both Title VI and the Hill-Burton Act, the Seventh Circuit dismissed a claim brought by indigent former patients against the Secretary of HEW to force termination of funds to a hospital, Davis v. Ball Memorial Hospital Assoc., 640 F.2d 30 (7th Cir. 1980).

In the instant case, plaintiffs seek both the termination of funding assistance to the LRA and various forms of injunctive relief designed to restore them to the financial and strategic position they felt they had in 1975 before they were de-designated. Such relief, while it may be obtained in large measure through plaintiffs suit against the Lynn defendants, is not available as against HUD under the statutory scheme discussed above. Within that scheme, and by means of a suit under the Administrative Procedure Act, if the agency's action were found to be irrational, unsupported by the record, or an abuse of discretion, the only relief available to plaintiff would be a remand to HUD for further administrative proceedings. Such an order would not include a finding as to whether discrimination had actually occurred, and would not dictate the final result of the administrative process, which would be carried on beyond the District Court's continuing control and supervision. Adams v. Richardson, 480 F.2d 1159, 1163 n.5 (D.C. Cir.1973). Plaintiffs have explicitly eschewed the notion of a remand or of further...