Johnson v. County of Chester, Civ. A. No. 75-3702.

CourtUnited States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
Citation413 F. Supp. 1299
Docket NumberCiv. A. No. 75-3702.
PartiesSarah Mae JOHNSON et al. v. COUNTY OF CHESTER et al.
Decision Date26 May 1976

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Mark S. Schwartz, David H. Moskowitz, Regional Housing Legal Services, Newtown, Pa., for plaintiffs.

John S. Halsted, James E. McErlane, West Chester, Pa., for County and Commissioners of Chester.

Robert J. Shenkin, West Chester, Pa., for Willistown Township and Supervisors.

Stephanie P. Lachman, Economic Litigation Section, Civ. Div., U. S. Dept. of Justice, Washington, D. C., for HUD.

LUONGO, District Judge.

This is an action under the Housing and Community Development Act of 1974, 42 U.S.C. § 5301, et seq. (Supp.1976) (hereinafter HCDA), the Fair Housing Act of 1968, 42 U.S.C. § 3601, et seq., the Civil Rights Act of 1964, 42 U.S.C. § 2000d, et seq., the Civil Rights Act of 1866, 1870 and 1871, 42 U.S.C. §§ 1981, 1982, 1983, and the Fifth and Fourteenth Amendments to the United States Constitution.

Plaintiffs, low income and non-white citizens of Chester County, Pennsylvania (County), seek a declaration that a grant of federal funds to County violates their rights under the above-cited statutes and the Constitution of the United States and they seek to enjoin transfer of such of the federal funds to County as are earmarked for Willistown Township, a political subdivision of County. Non-federal defendants are the public entities, Chester County and Willistown Township, together with the individual members of the Board of Commissioners of Chester County and the Supervisors of Willistown Township. Federal defendants are the Department of Housing and Urban Development (HUD), and the Secretary, the Regional Administrator and the Area Director of HUD.

The case is before me on plaintiffs' motion for preliminary injunction and motions to dismiss filed by the non-federal defendants.

To further an understanding of the present action, it is helpful to outline the scheme of the HCDA. The passage and approval of the Act was the congressional response to the increasing deterioration of the nation's urban centers. The paramount objective of the Act "is the development of viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income." 42 U.S.C. § 5301(c). To that end, the Secretary of HUD is empowered to make grants to the States and their political sub-divisions to finance community development programs for a sum not to exceed 8.4 billion dollars prior to the end of fiscal year 1977. 42 U.S.C. § 5303.

The provisions of the HCDA most relevant to the present action are §§ 5304, 5309, and 5311.

Section 5304 sets forth the specific requirements and obligations of the applicant and the Secretary. Compliance with these provisions is mandatory in that no grant may be made unless the requirements are met.1 These requirements include: (a) a summary of the particular development plan which identifies the community needs, discloses a "comprehensive strategy" to accomplish these needs, and specifies short and long term development objectives consistent with area wide planning and urban policies. 42 U.S.C. § 5304(a)(1); (b) formulation of a program which includes the activities to be undertaken and the costs and location thereof, alternative sources available to meet community needs and objectives, and considers environmental factors. 42 U.S.C. § 5304(a)(2); (c) the description of a program geared to eliminate and prevent urban deterioration and provide essential public services where needed. 42 U.S.C. § 5304(a)(3); (d) the submission of a housing plan which assesses the conditions and needs of lower income, elderly and handicapped families, specifies realistic goals for meeting these needs in terms of construction, indicates the location of this housing with the objectives of revitalization, restoration and avoidance of undue concentration of assisted persons in areas having a high proportion of low income families, and assures the existence of adequate public services. 42 U.S.C. § 5304(a)(4); (e) assurances that the program will be conducted and administered in conformity with Title VI of the Civil Rights Act of 1964 and Title VIII of the Fair Housing Act of 1968. 42 U.S.C. § 5304(a)(5); (f) assurances of adequate citizen participation in the application for the plan. 42 U.S.C. § 5304(a)(6); and (g) a certification, to the satisfaction of the Secretary, that the community development plan will primarily benefit low or moderate income families, or aid in the prevention or elimination of urban slums. The applicant may also certify that the program is designed to meet other needs of "particular urgency." 42 U.S.C. § 5304(b)(2).

Once the applicant has complied with the above requirements, the role of the Secretary comes into focus under § 5304(c). This section provides that an application must be approved unless the Secretary determines: (a) that the applicant's description of its needs and objectives is "plainly inconsistent" on the basis of generally available facts or data, 42 U.S.C. § 5304(c)(1); (b) that the planned activities are "plainly inappropriate" to meeting the specified needs and objectives, 42 U.S.C. § 5304(c)(2); or (c) the application does not comply with the requirements of the Act or other applicable law or proposes ineligible activities, 42 U.S.C. § 5304(c)(3).

Section 5304(d) provides for the submission of annual reports to the Secretary. These reports must contain: (a) a performance evaluation regarding the activities carried out pursuant to the grant; and (b) an assessment as to whether the activities conform to the objectives of the Act as well as the grantee's stated needs and objectives. Further, this section requires the Secretary to make such reviews and audits as are necessary to determine whether the grantee is administering and conducting its development program as set forth in the application, whether that program is in conformity with the Act and other applicable laws, and whether the grantee retains the capacity to carry out the approved program of development. The Secretary is then empowered to make whatever adjustments are appropriate in the amount of the annual grants in light of the findings made pursuant to the review and audit.

Section 5304(f) provides that any application subject to the Secretary's approval under subsection (c), is deemed approved upon the passage of 75 days unless the Secretary acts affirmatively to disapprove by notifying the applicant of the specific reasons for disapproval.

Section 5304(g) empowers the Government Accounting Office to audit the financial transactions of recipients insofar as they relate to the funds provided under the Act.

Section 5309(a) contains a non-discrimination clause applicable to any programs or benefits funded under this Act. Section 5309(b) provides that if the Secretary should determine that any recipient of assistance under the Act has failed to comply with subsection (a), the Secretary is to notify the chief executive officer of the state or unit of local government in an attempt to secure compliance. If such compliance is not forthcoming in sixty days, the Secretary is authorized to recommend to the Attorney General of the United States that an appropriate civil action be instituted, or to exercise such other powers or functions as provided by law.

Section 5311(a) empowers the Secretary to terminate, reduce or limit payments made to recipients under this Act if the Secretary finds that the grantee has failed to comply with any provisions of the Act. Subsection (b) permits the Secretary to refer the matter to the Attorney General if the Secretary has reason to believe that the recipient has failed to comply "substantially" with any provisions of the Act. Subsection (c) provides the basis for judicial review to any recipient who receives notice of any action taken by the Secretary pursuant to subsection (a).

The scheme of the Act, in short, contemplates a continuing relationship and "dialogue" between HUD and the grantee during the three year tenure of a given community development project. Knoxville Progressive Christian Coalition v. Testerman, 404 F.Supp. 783, 789 (E.D.Tenn.1975).

Resort to the legislative history of the Housing and Community Development Act reinforces this conclusion. In adopting requirements for application and review, the stated congressional purpose was to:

". . . streamline the existing procedures of the categorical programs; to expand the role and responsibility of local governments in implementing community development programs; and to reduce the considerable processing burden now borne by HUD." 3 U.S.Code Cong. & Admin.News, p. 4324 (1974).

As to the role of the Secretary, the legislative history reveals that:

"The Secretary's review should be limited in its scope, but should include both substantive and legal aspects. The Secretary, before approving applications, should be satisfied that the purposes of the chapter, as well as other Federal Laws related to development, such as contained in the Equal Opportunities, Environmental Protection, and the A-95 Programs, are being met. The Committee anticipates that the Secretary, in establishing review procedures, would incorporate a reasonable review of the available information related to local needs; of projected program benefits in relation to the community's needs; of the consistency and comprehensiveness of the program in light of the objectives of the bill; and of the actual progress achieved with the Federal assistance provided. The Committee, however intends to reduce significantly the unnecessary `second-guessing by Washington' that has been criticized under existing programs. It believes that the shift from project to program review will accomplish this, in large measure. The statute would eliminate many of the
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