Davis v. Romney

Decision Date14 January 1974
Docket NumberNo. 73-1249,73-1420.,73-1249
Citation490 F.2d 1360
PartiesRubylee DAVIS et al., Appellants in No. 73-1249. v. George W. ROMNEY, Individually and in his capacity as Secretary of Housing and Urban Development, et al., Appellants in No. 73-1420.
CourtU.S. Court of Appeals — Third Circuit


George D. Gould, Sally Akan, Jonathan M. Stein, Community Legal Services, Inc., Philadelphia, Pa., for plaintiffs-appellants in No. 73-1249 and for plaintiffs-appellees in No. 73-1420.

Robert E. J. Curran, U.S. Atty., Walter S. Batty, Jr., Asst. U.S. Atty., for appellees in No. 73-1249 and for appellants in No. 73-1420.

Israel Packel, Atty. Gen., J. Justin Blewitt, Jr., Deputy Atty. Gen., amicus curiae.

Before SEITZ, Chief Judge, and HUNTER and WEIS, Circuit Judges.


SEITZ, Chief Judge.

Plaintiffs are five purchasers of homes whose mortgages were insured by the Federal Housing Administration (FHA). Insurance on these mortgages was issued under the "existing home" provisions of §§ 221 and 235 of the National Housing Act, 12 U.S.C. §§ 1715l and 1715z (1970).1 Their complaint, on behalf of "all persons in the City of Philadelphia who have purchased, are in the process of purchasing, or may purchase in the future, homes under the 221(d)(2) and 235 Existing House Programs", alleges that Philadelphia FHA officials violated the Act by insuring mortgages on homes that did not meet the requirements of Philadelphia's Housing Code. The complaint asks for mandamus, injunctive and declaratory relief against officials of FHA and the Secretary of Housing and Urban Development (HUD), the department under which FHA operates. Plaintiffs also prayed for damages against the United States.

Plaintiffs moved for partial summary judgment supported by affidavits. Defendants filed no opposing affidavits but moved for dismissal of the complaint. The district court granted plaintiffs' motion in part, declaring that the FHA officials had violated the Act and enjoining them from insuring mortgages on properties not complying with the Housing Code. The court denied defendant-officials' motion to dismiss the complaint against them but granted the government's motion to dismiss the portion of the complaint seeking damages against the United States. 355 F.Supp. 29 (E.D.Pa.1973). Plaintiffs appeal the dismissal of their damage complaint, and defendants appeal the grant of partial summary judgment to plaintiffs.

We turn first to the defendants' appeal. Since they filed no counter affidavits they, of course, limit themselves to asserting reasons why the legal conclusions on which the summary judgment rests are erroneous.


Defendants first contend that the district court was without jurisdiction to entertain the claims on which judgment was granted for plaintiffs because plaintiffs lack standing to sue for injunctive and declaratory relief. Where, as here, an action is brought in federal court challenging federal administrative action as inconsistent with a statute, the plaintiff must meet two requirements to show standing: (1) the challenged action must have injured some interest of the plaintiff, and (2) Congress must have intended that plaintiff be permitted to seek judicial review of such statutory violations. Sierra Club v. Morton, 405 U.S. 727, 733, 92 S. Ct. 1361, 31 L.Ed.2d 636 (1972); see Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 153-154, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). Defendants do not deny that plaintiffs have met the first standing requirement. Defendants do, however, contend that plaintiffs do not satisfy the second standing requirement. Unlike the first requirement, the requisite of Congressional authorization does not derive from the limitation of Article III courts to decision of cases or controversies; it is not designed to ensure a contest between adverse interests. Instead, the second standing requirement derives from Congressional power to regulate, within limits, jurisdiction of the federal courts. See Sierra Club v. Morton, supra at 732 n. 3 of 405 U.S., 92 S.Ct. 1361; Association of Data Processing Service Organizations v. Camp, supra at 154 of 397 U.S., 90 S.Ct. 827.

Although the precise limits of Congressional power over federal jurisdiction are not clearly drawn, it is settled law that Congress can in legislating confide certain decisions to the discretion of administrative officials, prohibiting judicial review of the correctness of those decisions. E. g., Switchmen's Union v. National Mediation Board, 320 U.S. 297, 64 S.Ct. 95, 88 L.Ed. 61 (1943). Similarly, subject to due process dictates, Congress can provide for administrative action and limit to a specified class the right to seek judicial review. E. g., L. Singer & Sons v. Union Pacific Railroad Co., 311 U.S. 295, 61 S.Ct. 254, 85 L.Ed. 198 (1940). Thus, where administrative action is challenged as violative of a statute, federal courts must ascertain whether Congress has prohibited or provided for "review at the behest of the plaintiff." Sierra Club v. Morton, supra at 732 of 405 U.S., at 1365 of 92 S.Ct. footnote omitted.

While it is not universally applicable, the Administrative Procedure Act (APA), 5 U.S.C. § 701 et seq. (1970), generally serves as the starting point for determining Congressional intent regarding judicial review of federal administrative action.2 Section 10 of the APA, 5 U.S.C. § 702 (1970), provides that any person "adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." The Supreme Court has interpreted this language as providing review to anyone who has suffered injury to an interest that is "`arguably within the zone of interests to be protected or regulated' by the statutes that the agencies were claimed to have violated." Sierra Club v. Morton, supra at 733, 92 S.Ct. at 1365 footnote omitted; Association of Data Processing Service Organizations v. Camp, supra at 153-156 of 397 U.S., 90 S.Ct. 827. Defendants urge us to hold that plaintiffs do not satisfy the zone of interests test that has been read into the APA's standing provision.

The theory advanced by defendants in support of this contention is that plaintiff's injured interest is in having the FHA Philadelphia Office insure only mortgages on homes complying with Philadelphia's Housing Code and that the allegedly violated provisions of the National Housing Act do not arguably protect this interest. We think that defendants misconceive the nature of the zone of interests test. The zone of interests test does not focus so precisely as defendants urge on the specifics of the complaint to determine the interest injured or on the allegedly violated statutory provision to determine the protection arguably afforded such interest.

Defendants argue that the relevant interest of plaintiffs for APA standing purposes is their interest in obtaining a remedy — FHA insurance of mortgages only on homes meeting housing code standards. That argument confuses the relevant interest for standing purposes under the APA with the merits of the case. This confusion is inherent in the "legal interest" test that some courts found embodied in the APA before the Supreme Court's rejection of that interpretation in Data Processing. The District Court, following the Data Processing test for determining whether a person is adversely affected or aggrieved as that phrase is used in the APA, correctly looked not to the remedy sought, but to the effect the challenged administrative action had on plaintiffs. Plaintiffs alleged an interest in obtaining a "decent home", and their pleadings and affidavits related facts showing that defendants' actions had impaired their ability to secure a decent home. We agree with plaintiffs and the district court that this is the relevant interest and that a sufficient showing had been made that it was injured by the defendants' actions.

Defendants' contention that plaintiffs' interest was not within the zone of interests of the allegedly violated statute also must fail. Defendants' argument that we must look to the particular provision of the National Housing Act that defendants are charged with violating again confuses standing under the APA with the merits of plaintiffs' claim.3 The district court complied with the Supreme Court's Data Processing decision by examining the statute, not the particular provision, purportedly violated to ascertain whether plaintiffs were "aggrieved ... within the meaning of a relevant statute." Beyond dispute, the interest of low-income families in obtaining "decent" housing is among the interests protected by the National Housing Act. Thorpe v. Housing Authority, 393 U.S. 268, 281, 89 S.Ct. 518, 21 L.Ed.2d 474 (1969); see 1954 U.S.Code, Cong. & Ad.News, pp. 2723, 2757-2758; 38 Op. Att'y Gen. 258 (1935). We agree with the district court that plaintiffs have standing to maintain this action for injunctive and declaratory relief.


Defendants also contend that the district court lacked jurisdiction over the plaintiffs' claims for injunctive and declaratory relief. Numerous jurisdictional grounds are asserted by plaintiffs. The district court found that it had jurisdiction on each of the asserted grounds, and defendants contest each finding. We reach only one of these findings: that the court below had jurisdiction under 28 U.S.C. § 1337 (1970). Section 1337, without qualification as to the amount in controversy, grants district courts jurisdiction over actions "arising under any Act of Congress regulating commerce ...." Defendants argue that the National Housing Act, under which this suit arises, is not an act regulating commerce within the meaning of § 1337.

In support of their position, defendants cite Potrero Hill Community Action Committee v. Housing Authority, 410 F.2d 974 (9th Cir.1969). In ...

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