Price v. Pierce

• Citation: 615 F. Supp. 173
• Decision Date: 25 June 1985
• Docket Number: No. 83 C 6291.,83 C 6291.
• Court: U.S. District Court — Northern District of Illinois
• Parties: Audrey PRICE, et al., Plaintiffs, v. Samuel PIERCE, etc., et al., Defendants.

615 F. Supp. 173

Audrey PRICE, et al., Plaintiffs, v. Samuel PIERCE, etc., et al., Defendants.

No. 83 C 6291.

United States District Court, N.D. Illinois, E.D.

June 25, 1985.

COPYRIGHT MATERIAL OMITTED

Kathrine Bissell, Jerry Brask, Prairie State Legal Services, Geneva, Ill., Barnard H. Shapiro, Prairie State Legal Services, Rockford, Ill., Kevin Kane, Prairie State Legal Services, Waukegan, Ill., Karen Engelhardt, Alf Sanford, Cook County Legal Assistance, River Forest, Ill., for plaintiffs.

Dan K. Webb, U.S. Atty., William T. Clabault, Asst. U.S. Atty., Chicago, Ill., Shalom Brilliant, Civ. Div., Washington, D.C., Anthony J. Ciccone, Jr., U.S. Dept. of Housing and Urban Development, Washington, D.C., for Samuel Pierce.

Richard T. Franch, Anton R. Valukas and Darryl M. Bradford, Jenner & Block, Chicago, Ill., for Illinois Housing Development Authority.

Lawrence C. Rubin, Andrew B. David, Arvey, Hodes, Costello & Burman, Chicago, Ill., for Grandwood Gardens Associates.

Jack B. Schmetterer, Elaine S. Fox, Loren J. Mallon, Gottlieb & Schwartz, Chicago, Ill., for Hawthorn Ridge Associates.

Sanford Kahn, Richard Christoff, Sanford Kahn, Ltd., Chicago, Ill., for Vernon Hills Associates II, Trails Venture and Groves of Hidden Creek.

John Powers Crowley, Robert M. Stephenson, Cotsirilos & Crowley, Ltd., Chicago, Ill., for Prairiebrook Venture.

MEMORANDUM OPINION AND ORDER

WILLIAM T. HART, District Judge.

The Hope Fair Housing Center ("Hope") and the six individually named plaintiffs brought this action against Secretary of Housing and Urban Development Samuel Pierce (the "Secretary"), the Illinois Housing Development Authority ("IHDA"), and the owners of six "Section 8" housing complexes located in this District (the "Developers"). Their complaint seeks "full utilization" of housing subsidies contractually allocated for use by low and moderate income families at the apartment complexes owned by the defendant Developers. Initially, the plaintiffs sought to enforce a policy of full utilization by invoking: (i) their Fifth and Fourteenth Amendment due process rights; (ii) an implied private right of action under the Housing Act of 1937, as amended (referred to as "Section 8"), 42 U.S.C. §§ 1437f et seq.; (iii) section 1983 as a remedy for violations of their rights under (i) and (ii); (iv) judicial review of the Secretary's actions pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 706; (v) their rights as third party beneficiaries under contracts between the Secretary, IHDA and the Developers; and (vi) an implied right of action under the Illinois housing laws.

By order entered November 28, 1983, the Court dismissed the plaintiffs' third party beneficiary claim and refused to recognize an implied private right of action under the Housing Act, but rejected the defendants' assertion that the plaintiffs had no property right in Section 8 benefits sufficient to sustain their due process and § 1983 claims. Also in the November 23rd order, the Court reserved ruling on the defendants' challenge to Hope's standing as a plaintiff, pending the Seventh Circuit's decision in a similar case.

On April 4, 1984, this Court certified a class of plaintiffs who were financially eligible for Section 8 assistance and otherwise acceptable for tenancy at the defendant Developers' apartment complexes but had been adversely affected by the alleged policy of underutilization.¹ In addition, the Court, acting sua sponte, dismissed IHDA as a party defendant to the plaintiffs' § 1983 and state law claims, based on the Supreme Court's decision in Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984). As a result of a series of motions to reconsider, clarify and join additional parties, on November 13, 1984 the plaintiffs filed a fourth amended complaint, which dismissed IHDA as a party defendant and joined IHDA officials A.D. Van Meter and James Kiley (together the "State defendants") as defendants to their due process and § 1983/federal housing act claims.

Currently before the Court are the parties' cross-motions for summary judgment on the claims advanced in the plaintiff's four-count fourth amended complaint (denial of property without due process, violation of rights under the federal housing laws, judicial review of the Secretary's actions, and violation of state housing laws).

STANDING

Initially, the State defendants' challenge to the plaintiffs' standing to maintain this action must be resolved. The State defendants maintain that the Seventh Circuit's decision in Hope, Inc. v. County of DuPage, 738 F.2d 797 (7th Cir.1984), mandates a finding that neither Hope nor the individual plaintiffs have standing to maintain this action. In County of DuPage, the Seventh Circuit found that the plaintiffs lacked standing to challenge alleged County Board practices where they had failed to identify specific housing projects affected by the challenged practices, as required by Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). County of DuPage is no bar to the standing of the individual plaintiffs here, as they have alleged (and shown) that the challenged practice of "underutilization" affected the availability of housing at six specific apartment complexes where they are applicants for housing.

This Court reserved ruling on Hope's asserted standing as a representative of its members and in its own right while the County of DuPage was being argued. The Seventh Circuit did not base its ruling on grounds which would differentiate Hope from the individual plaintiffs. Rather, the Seventh Circuit found that since Hope's standing was no better than that of the individual plaintiffs, it too lacked standing. County of DuPage also refused to expand Hope's representational standing beyond its members to include all those for whom Hope seeks housing. Here, Hope has presented the claim of particularized injury that was lacking in County of DuPage. Hence, Hope has standing both as a representative of its members (who are otherwise within the class as certified) and in its own right to maintain this action. See Havens Realty Co. v. Coleman, 455 U.S. 363, 378-79, 102 S.Ct. 1114, 1124, 71 L.Ed.2d 214 (1982).

DUE PROCESS CLAIMS

All defendants assert that in light of the Seventh Circuit's recent decision in Eidson v. Pierce, 745 F.2d 453 (7th Cir.1984), the plaintiffs' due process claims fail for want of a property right requiring due process protection. The State defendants go on to assert that Eidson also precludes the plaintiffs' § 1983 claim, which is based upon a violation of purported rights established by the federal housing laws.

Eidson involved an effort by applicants for Section 8 housing at apartment complexes in Indiana and Wisconsin to secure hearings and a written explanation of the reasons for their rejection by project owners. As do the plaintiffs in this action, the Eidson plaintiffs argued that financially eligible applicants enjoy a property right to Section 8 benefits deserving due process protection. The Seventh Circuit flatly rejected their asserted property right.

The plaintiffs contend that this case is distinguishable from Eidson as it involves a challenge to the total amount of Section 8 housing available to all applicants rather than "the process used to allocate these limited and valuable benefits among a large number of eligible applicants" examined in Eidson. 745 F.2d at 457. However, a fair reading of Eidson does not support this distinction. This Court's November 23rd order, which denied the defendants' motion to dismiss the due process claim, recognized but rejected the tenant/applicant distinction adopted by the district courts in Eidson and Germain v. Recht-Goldin-Seigel Properties (consolidated on appeal with Eidson). In rejecting the tenant/applicant distinction, this Court relied upon Ressler v. Pierce, 692 F.2d 1212 (9th Cir.1982) and Davis v. Ball Memorial Hospital Ass'n, 640 F.2d 30 (7th Cir.1980). However, in Eidson the Seventh Circuit adopted the tenant/applicant distinction, rejected the rationale of Ressler and limited the reach of Davis. The relevant distinction mandated by Eidson is between tenant and applicant rather than the distinction suggested by the plaintiffs between procedural rights to preserve the existing amount of available housing for all applicants and procedures to allocate housing among applicants. Since the plaintiffs here are all applicants, their due process claims are foreclosed by Eidson.

SECTION 1983 CLAIM

Moreover, Eidson also defeats plaintiffs' § 1983 claims based on the federal housing statute. The plaintiffs rely upon Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980), for the proposition that "a federal statute creating enforceable rights may be enforced in a Section 1983 action," despite the absence of any implied private right of action under the statute itself. However, the plaintiffs' argument assumes its conclusion. The Seventh Circuit in Eidson found that "there is nothing to suggest that Congress intended potential tenants of Section 8 projects to have enforceable rights to Section 8 housing in particular projects." 745 F.2d at 462.

The Supreme Court has recognized two exceptions to the application of § 1983 to federal statutes, one of which precludes plaintiffs' § 1983 claim. No § 1983 claim may be based on a federal statute which fails to create "enforceable rights." See Middlesex City Sewerage Authority v. Sea Clammers, 453 U.S. 1, 9, 101 S.Ct. 2615, 2620, 69 L.Ed.2d 435 (1981) (explaining Pennhurst State School & Hospital v. Halderman, 451 U.S. 1, 18, 101 S.Ct. 1531, 1540, 67 L.Ed.2d 694 (1981)). See also Gould, Inc. v. Wisconsin Dept. of Industry, Labor & Human Relations, 750 F.2d 608, 615-16 (7th Cir.1984); Polchowski v. Gorris, 714 F.2d 749, 750-51 (7th Cir.1983). Thus, the plaintiffs' § 1983 claim rises or falls with its due process claim, as both assert 42 U.S.C....