Nasser v. City of Homewood

Decision Date22 March 1982
Docket NumberNo. 80-7805,80-7805
Citation671 F.2d 432
PartiesFred E. NASSER, Sr., Nassery Nasser, Mona Nasser Hersheway, Marie Nasser Weigand, and Jeanette Nasser Acton, Plaintiffs-Appellants, v. The CITY OF HOMEWOOD, a municipal corporation, Robert G. Waldrop, as Mayor of the City of Homewood, Leon Chambers, as Chairman of the City Council of the City of Homewood, Charles Sutton, Ralph Lurie, H. J. Wurtele, Margaret Robertson, Pauline Montgomery, Edna McCune, William W. Cox, Frank M. Dichiara, E. L. Harris, and Charlie Weidman, as members of the City Council of the City of Homewood, Defendants-Appellees.
CourtU.S. Court of Appeals — Eleventh Circuit

Corretti & Newsom, Douglas Corretti, Donald H. Brockway, Jr., Birmingham, Ala., for plaintiffs-appellants.

James W. Porter, II, Birmingham, Ala., for defendants-appellees.

Appeal from the United States District Court for the Northern District of Alabama.

Before TUTTLE, HENDERSON and HATCHETT, Circuit Judges.

HENDERSON, Circuit Judge:

The plaintiffs are the owners of some 9.5 acres within the corporate limits of the city of Homewood, Alabama. They brought this action challenging the action of the defendants in rezoning of their property from multi-family residential to single-family residential, alleging violations of Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), 42 U.S.C. §§ 3601-3619; the just compensation and due process clauses; and Alabama zoning statutes. The district court granted the defendants' motion for summary judgment, and the plaintiffs appeal that decision of the district court.

Prior to annexation into the city of Homewood in 1979, the plaintiffs' property had been zoned R-4 (multi-family residential) on the recommendation of the Jefferson County Planning Commission. By Act No. 79-255 (June 26, 1979), the Alabama legislature extended the boundaries of Homewood to include five parcels of land. The plaintiffs' property was located in Parcel V, and comprised roughly one-half of that tract's area. Parcel V was zoned R-2 (single-family residential) by the Homewood City Council, based on the recommendation of the Homewood Planning Commission, in Ordinance No. 1385 (Jan. 14, 1980).

The plaintiffs then filed this action for declaratory, injunctive and monetary relief, claiming that Ordinance No. 1385: (1) violated the Fair Housing Act; (2) constituted an unlawful taking without just compensation in violation of the Fifth and Fourteenth Amendments; (3) was arbitrary and capricious because it did not bear a substantial relationship to the health, safety and welfare of the public; (4) violated due process and (5) contravened state statutory notice requirements for zoning changes. The defendants moved to dismiss the complaint on several grounds, three of which are pertinent here: lack of standing under the Fair Housing Act, failure to state a claim of an unlawful taking and abstention. The district court converted this motion to dismiss to one for summary judgment pursuant to the provisions of Fed.R.Civ.P. 12(b), and the parties filed affidavits in support of their contentions. 1

THE UNDISPUTED FACTS

Although the parties differ as to the conclusions to be drawn, the evidence submitted on the defendants' motion is without controversy. In 1976 the plaintiffs entered into an agreement with a developer for the construction of a multi-family housing complex on the property. 2 The developer "looked into the possibility of having the said real property developed under some program supported by the Housing and Urban Development Department." Robert D. Barbour, an urban planner, stated in an affidavit that "(i)t was the intent of the owner of said property to develop a multi-family housing project on said property that would make some units available to low- and moderate-income families through rent subsidies." 3 Nasser conceded that "(t)he development did not materialize even though the developer spent some time in pursuing the project." There is no evidence that the 1976 plans progressed beyond the plaintiffs' agreement with the developer, and the developer's inquiry of the Department of Housing & Urban Development. In particular, there is no indication that the 1976 plans were viable in any way in 1979, or that the plaintiffs pursued, or even contemplated, any low or moderate income development other than the one in 1976.

Ralph J. Lurie, a member of both the planning commission and the city council, made a detailed affidavit concerning his contact as a member of those bodies with Nasser. He stated that "(a)t no time during his several appearances before Homewood authorities, however, did Mr. Nasser state or suggest that his purpose in seeking an R-4 classification was to build a multi-family project for the use and benefit of low income or minority groups." According to Lurie, at every point when the plaintiffs' plans were discussed Nasser or his attorney represented that they wished to build "an exclusive-high rent apartment complex of the type and sort which would only appeal to the upper income bracket." The plaintiffs neither impeached nor contradicted this evidence.

Neither was there any evidence that the 1976 project was in any way affected by or related to racial or other minority interests. Affidavits of the plaintiffs' witnesses contain the implicit assumption that "low and moderate-income housing" is synonymous with housing for minorities protected by the Fair Housing Act. The defendants do not attack this apparent deficiency in the plaintiffs' evidence. We would not lightly, if at all, indulge such an assumption. See Warth v. Seldin, 422 U.S. 490, 494-95 & n. 5, 502, 95 S.Ct. 2197, 2203 & n. 5, 2207, 45 L.Ed.2d 343, 352 & n. 5, 356-57 (1975). But this problem, if it is a problem, is of no moment here because there is a complete lack of showing that those plans continued to exist in 1979. The plaintiffs do not suggest that any 1979 "exclusive-high rent" project had any connection to minority interests.

The just compensation attack is predicated on the fact that the property had a fair market value of $285,000.00 when zoned R-4 but was reduced to a value of only $135,000.00 after it was rezoned to an R-2 classification. One expert for the plaintiffs, Dr. L.T. Reeves, Jr., represented that the highest and best use of the property from an economic point of view was that of multiple family use. There is no indication that the property was deprived of its entire value as a result of the rezoning.

THE DISTRICT COURT ORDER

In granting the defendants' motion for summary judgment, the district court first held there was no legal basis for the cause of action alleged under the Fair Housing Act because the lack of a "proposed project" precluded a finding of injury in fact under the tests set out in Village of Arlington Heights v. Metropolitan Housing Devel. Corp., 429 U.S. 252, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977) and Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). This was true, implied the court, even though the plaintiffs demonstrated an injury resulting from the diminution of the property's value. Additionally, the district court found that the plaintiffs did not identify the third parties whose interests they might assert under the Fair Housing Act. The just compensation complaint was likewise dismissed for the reason that the acts attributable to the defendants did not constitute an unlawful taking violative of the United States Constitution.

The district court then abstained from deciding the other constitutional claims, specifying three considerations for its conclusion. First, it found that a determination of the state law issues could eliminate the need to decide the federal constitutional questions, or could present the federal issues in a different posture. Second, the plaintiffs had not exhausted their remedies before the zoning authorities and in the state courts. Finally, the court reasoned that intervention into zoning matters was inappropriate because zoning is "a sensitive matter subject to comprehensive local regulation," and resulting federal-state conflict would be "unseemly" and unnecessarily impair the state's zoning function. Believing the last ground for abstention was governed by Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), the court dismissed the action without prejudice.

STANDING UNDER THE FAIR HOUSING ACT

The plaintiffs assert that the demise of their 1976 "proposed project" constitutes an injury permitting them to sue under the Fair Housing Act. As noted earlier, this project was no longer in existence at the time this action was filed. Warth v. Seldin is dispositive of this claim. There a building developer applied in late 1969 for a zoning variance to allow construction of a housing project. The Court noted that:

The complaint, however, does not allege that the Penfield Better Homes project remained viable in 1972 when this complaint was filed, or that respondents' actions continued to block a then-current construction project. In short, neither the complaint nor the record supplies any basis from which to infer that the controversy between respondents and Better Homes, however vigorous it may once have been, remained a live, concrete dispute when this complaint was filed.

422 U.S. at 517, 95 S.Ct. at 2214-15, 45 L.Ed.2d at 365-66 (footnote omitted).

The plaintiffs contend further that the diminution in value of their property as a result of the defendants' conduct is an injury in fact, and thus they have standing under §§ 812(a) and 817 of the Fair Housing Act, 42 U.S.C. §§ 3612(a) and 3617. We consider these sections in turn. Section 812(a) of the Fair Housing Act provides, in pertinent part:

The rights granted by sections 3603, 3604, 3605, and 3606 of this title may be enforced by civil actions in appropriate United States district courts without regard to the amount in controversy ....

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