Merge v. Sharott

• Decision Date: 16 February 1965
• Docket Number: No. 14770.,14770.
• Citation: 341 F.2d 989
• Parties: George MERGE and Weldon R. Hooper, Trading and Doing Business as Asphalt Products Company, a Partnership, Plaintiffs-Appellants, v. Harry I. SHAROTT, Area Coordinator, Urban Renewal Administration of the Housing and Home Finance Agency of the United States of America, Robert C. Weaver, Administrator, Housing and Home Finance Agency of the United States of America, and Urban Redevelopment Authority of Pittsburgh, Defendants-Appellees.
• Court: U.S. Court of Appeals — Third Circuit

341 F.2d 989 (1965)

George MERGE and Weldon R. Hooper, Trading and Doing Business as Asphalt Products Company, a Partnership, Plaintiffs-Appellants, v. Harry I. SHAROTT, Area Coordinator, Urban Renewal Administration of the Housing and Home Finance Agency of the United States of America, Robert C. Weaver, Administrator, Housing and Home Finance Agency of the United States of America, and Urban Redevelopment Authority of Pittsburgh, Defendants-Appellees.

No. 14770.

United States Court of Appeals Third Circuit.

Argued May 8, 1964.

Reargued November 20, 1964.

Decided February 16, 1965.

As Amended April 2, 1965.

James E. McLaughlin, McArdle, Harrington, Feeney & McLaughlin, Pittsburgh, Pa. (John J. Hickton, Pittsburgh, Pa., on the brief), for appellants.

Stanley W. Breenfield, Asst. U. S. Atty., Pittsburgh, Pa. (Gustave Diamond, U. S. Atty., Pittsburgh, Pa., on the brief), for appellees, Housing & Home Finance Agency and Urban Renewal Admn.

Theodore L. Hazlett, Jr., Pittsburgh, Pa., on the brief, for appellee Urban Redevelopment Authority of Pittsburgh.

Before BIGGS, Chief Judge, and McLAUGHLIN, KALODNER, STALEY, HASTIE, GANEY, SMITH and FREEDMAN, Circuit Judges.

McLAUGHLIN, Circuit Judge.

This is an appeal from an order of the District Court of the Western District of Pennsylvania, granting defendants' motion to dismiss and entering summary judgments in their favor.

The plaintiffs-appellants, George Merge and Weldon R. Hooper, are citizens of Pennsylvania, and partners in a business known as Asphalt Products Company. This business is located in the City of Pittsburgh and operates as a unit from two leased buildings on opposite sides of Metropolitan Street in that city.

Defendant Urban Redevelopment Authority of Pittsburgh (URA) is a body corporate and politic, organized under the Urban Redevelopment Law of Pennsylvania (Pa.Stat.Ann. tit. 35, Section 1704 (1964)) and authorized to contract for federal assistance in aid of its programs. Pa.Stat.Ann. tit. 35, Section 1718 (1964).

Defendant Robert C. Weaver, Administrator of the Housing and Home Finance Agency (HHFA), is an officer of the United States, authorized to enter into contracts for federal assistance, pursuant to the provisions of the Federal Slum Clearance Act (Act of July 15, 1949, c. 338, 63 Stat. 413, Title I, 42 U.S.C. §§ 1450-1462 (1958) as amended. Defendant Harry I. Sharott is an Area Coordinator of the HHFA.

Duly acting within their powers, and pursuant to the aforementioned governing statutes, on November 3, 1960 the URA entered into a loan and grant contract with the HHFA, Robert C. Weaver, Administrator, for assistance to carry out a specific urban renewal project known as the Chateau Street West Project. Under this contract it was provided that relocation payments be paid to businesses and families displaced by the urban renewal project.¹

The boundaries of this redevelopment project fell between the two buildings leased by plaintiffs, so that on October 6, 1961, the URA at its meeting condemned only the building within the project area. However, because plaintiffs' business was integrated and necessarily operated as a unit, plaintiffs had to move their whole business, including that portion thereof located in the building outside the project area.

On August 27, 1962, the URA petitioned the Court of Common Pleas of Allegheny County for the appointment of viewers to determine the damages for the taking of that building. Duly appointed, the Board of Viewers held hearings at which testimony was introduced and a claim made for relocation and moving expenses involving the building outside the project area. Relief as to this latter claim was denied.

A complaint seeking a declaratory judgment had been filed in the United States Court for the Western District of Pennsylvania. Therein, the plaintiffs-appellants "demanded judgment against the defendants declaring that the defendants, under the authority of the aforesaid statute (42 U.S.C. 1456 (1958)) of the United States of America, are obligated to pay to the plaintiffs, the total certified, actual moving expenses of the plaintiffs' business concern, that is to say, the total moving costs of Building No. 1 and No. 2, less any amount heretofore paid by the defendants."

The plaintiffs had received relocation payments in the amount of $42,339.37 which represented the expenses incurred in moving that portion of the business which was located in the project area and although no amount is specified in the complaint as improperly withheld, plaintiffs actually seek a recovery of $30,500, the balance of the reasonable and necessary cost of moving their said business.

The District Court proceeding had been stayed, pending the outcome of the Board of Viewers hearing. But when the Court of Common Pleas made the Board's award absolute, from which no appeal was taken, defendants-appellees moved to dismiss the District Court complaint because of the plaintiffs' lack of standing to sue. The District Court judge said that he thought "* * * whoever is in charge should have paid, should have paid the total expenses of relocation of the business as an administrative matter. It seems to me just and fair that they should have paid it * * *." (Emphasis supplied) However, he denied relief, because as he construed the statute, no legal right to the relocation payments ran to the plaintiffs and thus they suffered no legal wrong in their denial entitling them to judicial review under the Administrative Procedure Act.

As in the court below, the plaintiffs here have sought recovery of the balance of the relocation payments allegedly withheld on the theory that they are "persons suffering legal wrong because of any agency action, or adversely affected or aggrieved by such action, * * *." and entitled to review under the Administrative Procedure Act. 5 U.S.C. § 1009 (1958).

The Urban Renewal Assistance Contracts are authorized by the Housing Act of 1949, also known as the Slum Clearance-Urban Renewal Act. Act of July 15, 1949, c. 338, Title I, 63 Stat. 413, 42 U.S.C. § 1450 et seq. (1958) as amended. Therein, Congress set forth its national housing policy, national housing goals and inter alia, a plan of federal assistance to relieve urban blight and bring about "a suitable living environment for every American family." 42 U.S.C. § 1441 (1958). When a community wishes to qualify for federal assistance under the Act, to redevelop slum and blighted areas, it first formulates a long-range plan and "workable program" for the elimination of slums and urban blight. 42 U.S.C. § 1451(c) (1958). See Sen.R.No.1472, 83d Cong.2d Sess., U.S.Code Cong. and Ad.News, P. 2758 (1954). The Administrator examines the "workable program" of the applicant-community, to determine whether it conforms with the board requirements of 42 U.S.C. § 1451(c) (1958). If he approves it, he may make federal assistance in the form of capital grants and loans available to the locality for specific urban renewal projects. 42 U.S.C. §§ 1452, 1453 (1958). Subject to certain statutory requirements (See 42 U.S.C. §§ 1454, 1455 (1958)) a Title I contract is then entered into between the Administrator of the HHFA and the local public agency, fixing the kind and amount of assistance (e. g., amount of local grant-in-aid and of federal assistance and whether relocation payments are to be made); and the urban renewal project actually commences. The local public agency takes title to the land, either by direct negotiation or by eminent domain proceedings after a public hearing (42 U.S.C. § 1455(d) (1958)), and after relocation of the occupants and site preparation, it usually sells the land to private developers and the hoped for result is a redeveloped slum-eliminated urban community.²

As above indicated, the Title I contract may provide for the payment of relocation expenses to businesses and families displaced by an urban renewal project. Unlike Section 1453 which provides for the "sharing of costs" for land tract assembly and slum clearance, limited by a statutory ratio, Section 1456(f)³ provides that relocation payments be totally funded by the Federal Government. However, to the extent amounts payable for relocation expenses under Section 1456(f) are compensable under state (condemnation) law, they may not be paid under a Title I contract. Administratively these payments are distributed by the local agency.⁴

It is the position of the defendants that Section 1456(f) and the Slum Clearance Act is a subsidy statute, under which no legal rights accrue to the intended beneficiaries thereof; that relocation payments authorized under the Act are not a matter of right but rather of Congressional grace. The contention of the plaintiffs is that pursuant to a declared national housing policy, the Housing and Home Finance Agency, through its Administrator had undertaken in this case to subsidize the Chateau Street Project; and entered into a Title I contract under which both the local public agency (URA) and the Administrator were bound and under which relocation payments for displaced businesses and families were provided. It is conceded by plaintiffs that initially the Administrator had the discretion whether or not to provide for the payment of relocation expenses (42 U.S.C. § 1456 (f) (1958)), but it is pointed out that in the Title I contract at bar he so provided and thereby solemnly pledged the faith of the United States to pay them. 42 U.S.C. § 1453(b) (1958).⁵ See Perry v. United States, 294 U.S. 330, 55 S.Ct. 432, 79 L.Ed. 912 (1935); 41 Ops.Atty. Gen. 138 (1953). This asserted binding obligation upon the United States was incurred pursuant to Congressional authority and design, as Congress from the first had evidenced a real and recurring concern for persons displaced as a result of the program,⁶ ultimately providing for compensation to mitigate their hardship. See S.Rep.No.368, 85th Cong., 1st Sess., U.S.Code Cong. & Ad.News, p. 1338 (1957); see...