Little Earth of United Tribes v. US DEPT. OF HOUS.

Citation584 F. Supp. 1292
Decision Date15 August 1983
Docket NumberCiv. No. 3-82-1096.
PartiesLITTLE EARTH OF UNITED TRIBES, INC., a Minnesota Nonprofit Corporation, and Little Earth Tenants' Committee, Plaintiffs, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Samuel R. Pierce, Jr., in his capacity as Secretary, United States Department of Housing and Urban Development (HUD), John Doe and Mary Roe, Agents and Officials of HUD, and Donald Omodt, in his capacity as Sheriff of Hennepin County, Defendants.
CourtUnited States District Courts. 8th Circuit. United States District Court of Minnesota


Larry Leventhal, Minneapolis, Minn., for Little Earth of United Tribes.

Randall Smith, Minneapolis, Minn., for Little Earth Tenants' Committee.

Francis X. Hermann, Asst. U.S. Atty., Minneapolis, Minn., Sarah E. Canzoneri and Geoffrey Patton, Washington, D.C., for defendants.


RENNER, District Judge.

Before the court is the federal defendants' motion for summary judgment as to plaintiffs' civil rights claims. Larry Leventhal, Esq., appeared for plaintiff Little Earth of United Tribes, Inc. (LEOUT) and Randall Smith, Esq., appeared for plaintiff Little Earth Tenants' Committee, now entitled Little Earth Residents' Council (Residents' Council). Francis X. Hermann, Assistant United States Attorney, Sarah E. Canzoneri, Esq. and Geoffrey L. Patton, Esq., appeared for defendants U.S. Department of Housing (HUD), Samuel R. Pierce, Jr., Secretary of HUD, John Doe and Mary Roe (the federal defendants).


LEOUT and the Residents' Council filed this action on April 13, 1982. The complaint contains numerous unnumbered paragraphs alleging that HUD was arbitrary, capricious and in violation of national housing policy in its administration of the Little Earth Housing Project and its ultimate decision to foreclose. Based on these alleged violations, plaintiffs sought declaratory relief and a permanent injunction enjoining foreclosure by HUD. Plaintiffs also alleged violations by defendants of 42 U.S.C. § 2000d et seq. (Title VI of the Civil Rights Act of 1964), 42 U.S.C. §§ 3601, et seq., 3608(d)(5) (Title VIII of the Civil Rights Act of 1968), 42 U.S.C. §§ 1981, 1982, 1983, 1985(3), and the due process clause of the U.S. Constitution.

On June 27, 1983, the court granted summary judgment in favor of the defendants on plaintiffs' claim that the alleged administrative action violations constituted a defense to foreclosure by HUD, 584 F.Supp. 1287. It therefore vacated the temporary restraining order then in effect and denied defendants' motion for appointment of a receiver. Plaintiffs' motions for partial summary judgment and for preliminary injunctions restraining the foreclosure sale, "relating to management" and restraining transfer of monies now in Little Earth's section 8 reserve account were also denied. Defendants' motions for summary judgment on the civil rights claims were reserved for later decision.

The court has now considered those motions and concludes that summary judgment is inappropriate as to plaintiffs' claims for injunctive and declaratory relief under Title VIII, Title VI, 42 U.S.C. §§ 1981, 1982, 1985(3) and the 5th Amendment to the United States Constitution. Plaintiff's claim for $2 million dollars in damages under these provisions is, however, barred by the doctrine of sovereign immunity and must be dismissed. Finally, the § 1983 claim must be dismissed for lack of subject matter jurisdiction.

A. Fifth Amendment

To establish a constitutional violation, plaintiffs must prove that HUD officials acted with a discriminatory purpose. See Personnel Administrator v. Feeney, 442 U.S. 256, 272-81, 99 S.Ct. 2282, 2292-97, 60 L.Ed.2d 870 (1979); Wyatt v. Pierce, No. 82-1383, slip op. at 4 (8th Cir., filed June 28, 1983). Defendants argue that summary judgment should be granted as to plaintiffs' fifth amendment claim because discriminatory purpose has not been pleaded and, in any case, such discriminatory intent could not be proved.1 The court disagrees.

First, the complaint is replete with allegations that defendants' administration of Little Earth and ultimate decision to foreclose was the result of racial bias and an intent to discriminate against American Indians. For example, in Section XIV of the complaint, entitled "HUD Violations of Civil Rights," plaintiffs allege that the decision by HUD officials not to allot flexible subsidy funds to the project was "motivated by the racially discriminatory practices and beliefs of certain HUD officials who did not wish to spend monies on a project that would be utilized in the future by American Indians..." Complaint, unnumbered page 30, 2nd full par.

Second, the issue of HUD officials' intent involves numerous questions of fact which preclude summary judgment. See Snell v. United States, 680 F.2d 545, 547 (8th Cir. 1982). As the Court of Appeals has recently noted, the determination of the existence of a discriminatory purpose requires a "sensitive inquiry" into the "totality of the relevant facts." Wyatt v. Pierce, No. 82-1383, slip op. at 4 (citations omitted). Factors which the court should explore include not only the effect of the challenged decisions, but the "historical background, the sequence of events leading up to the challenged decisions, the departures from the normal procedural sequence, the substantive departures from the norm, and the alternatives that were available." Id. at 5. The final test is whether the challenged actions could not "reasonably be explained without reference to racial concerns." Id., quoting Columbus Board of Education v. Penick, 443 U.S. 449, 461, 99 S.Ct. 2941, 2948, 61 L.Ed.2d 666 (1979).

Applying these tests in Wyatt, the court found that HUD officials' failure to follow-up on numerous irregularities in the Texarkana housing project, including the facts that the project had been almost totally segregated since its inception in 1948 and that white applicants were on waiting lists nearly 46 days less than blacks, constituted the discriminatory intent required for a fifth amendment violation. Wyatt, slip op. at 34. Although the allegations in this case are dissimilar, the Wyatt court's discussion of the inquiry required for a constitutional claim illustrates the inappropriateness of summary judgment on plaintiffs' fifth amendment claim.

B. Title VIII of The Civil Rights Act of 1968

Plaintiffs also allege that defendants' actions in refusing to respond to rent increase requests, making unreasonable demands, and dealing in bad faith are violative of Section 801 of Title VIII of the Civil Rights Act of 1968, 42 U.S.C. § 3601, which states that "it is the policy of the United States to provide, within constitutional limitations, for fair housing throughout the United States." Under § 3608(d)(5), furthermore, the Secretary of HUD has an affirmative duty to administer housing and urban development programs in a manner that will further the policies of fair housing.

The scope of review of agency action under Title VIII is narrow. HUD has great discretion in choosing methods to achieve national housing goals, but its action will be overturned if found to be arbitrary and capricious within the meaning of Section 706(2)(a) of the Administrative Procedure Act, 5 U.S.C. § 706(2)(a). Wyatt, slip op. at 38; Shannon v. HUD, 436 F.2d 809 (3d Cir.1970); King v. Harris, 464 F.Supp. 827 (E.D.N.Y.1979).

In Wyatt, the court held that its finding that HUD had committed a constitutional violation mandated a conclusion that it had not met its responsibility to promote fair housing. No. 82-1383, slip op. at 37. A constitutional violation is not a prerequisite to a violation of Title VIII, however; all that is required is proof that HUD failed to carry out its affirmative duty to "`institute action the direct result of which was to be the implementation of the dual and mutual goals of fair housing and the elimination of discrimination in that housing.'" Banks v. Perk, 341 F.Supp. 1175, 1182 (N.D.Ohio 1972), aff'd in part, rev'd in part on other grounds, 473 F.2d 910 (6th Cir.1973), quoted in Wyatt, slip op. at 38. Since the parties vigorously dispute many of the relevant facts, the court cannot say at this stage of the litigation that HUD has met its duty under Title VIII. Summary judgment is therefore inappropriate.

C. Title VI of the Civil Rights Act of 1964

Summary judgment is equally inappropriate as to plaintiffs' claim under Title VI. Section 601, 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.

Federal agencies are required by section 602, 42 U.S.C. § 2000d-1 to enforce section 601. Under section 602, each agency must issue rules and regulations consistent with the objectives of section 601 and effect compliance by (1) termination of or refusal to grant funding assistance, or (2) any other means provided by law. Section 603, 42 U.S.C. § 2000d-2, authorizes judicial review of agency actions taken pursuant to section 602 "in accordance with section 10 of the Administrative Procedure Act." A case can be remanded to HUD for further administrative proceedings if the agency's actions are found to be irrational, unsupported by the record, or an abuse of discretion. Adams v. Richardson, 480 F.2d 1159, 1163 (D.C.Cir.1973) (en banc) cited in Wyatt, slip op. at 34-35 n. 22.

As the Wyatt court recently observed, although courts are generally in agreement that a private cause of action exists under Title VI against a federal funding recipient, see, generally, id. n. 23, a controversy exists whether a private cause of action also exists against a federal funding agency. Id. at 35. Finding that "HUD is liable to the plaintiffs regardless of how we answer the questions raised under the statute," the...

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