Selden Apartments v. U.S. Dept. of Housing and Urban Development

Decision Date07 March 1986
Docket NumberNo. 85-1048,85-1048
Citation785 F.2d 152
CourtU.S. Court of Appeals — Sixth Circuit

Chui Karega, argued, Detroit, Mich., for plaintiff-appellant.

Geneva Halliday, Janice Kittel Mann, Asst. U.S. Atty., argued, Detroit, Mich., for defendants-appellees.

Before CONTIE and MILBURN, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.

CONTIE, Circuit Judge.

Selden Apartment Associates (Selden) appeals the dismissal of its claims brought under section 16 of the Civil Rights Act of 1870 (42 U.S.C. Sec. 1981) and section 1 of the Civil Rights Act of 1866 (42 U.S.C. Sec. 1982). Selden also appeals the jury verdict in favor of the United States Department of Urban Development (HUD) in the remainder of Selden's unfair housing action brought pursuant to Title VIII of the Civil Rights Act of 1968, the Fair Housing Act (42 U.S.C. Sec. 3601 et seq. ), and Article III, section 2 of the United States Constitution. Selden argues that the dismissal of its Secs. 1981 and 1982 actions against HUD on the basis of sovereign immunity was incorrect. Selden further argues that the district court failed to instruct the jury on the burden of proof in a racial discrimination case in accordance with the principles of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). Selden lastly challenges two evidentiary rulings of the district court, which excluded certain evidence at trial. For the reasons that follow, we affirm.


Selden is a limited partnership based in Detroit, Michigan. It was organized by black individuals for the purpose of submitting a bid to purchase the Selden Court Apartments, located in Detroit. In March of 1981, HUD offered the apartments for sale with housing assistance payments pursuant to section 8 of the United States Housing Act of 1937, as amended (42 U.S.C. Sec. 1437f). HUD provided the following information, concerning the process of selecting a purchaser, to prospective purchasers of the apartments. In the selection process, purchase proposals were to be evaluated on the basis of twenty-two specific criteria. The four main areas evaluated by the criteria were: (1) experience and qualifications; (2) proposed ownership and management program; (3) program management and resources; and (4) city, tenant and community comments. The instructions stated that each of the twenty-two factors would be awarded a point value by HUD ranging from zero (unacceptable) to five (excellent), with a maximum overall point total of 110. A rating of zero on any one of the criteria automatically would disqualify a proposal as unacceptable. The instructions further stated that proposals receiving 90 or more total points and no unacceptable ratings would be deemed "competitive" and HUD would select the "competitive" proposal with the highest bid as the successful proposal. 1

Selden, Ye Olde Realty (YOR), and three other concerns submitted proposals to purchase the apartments. Selden offered a purchase price of $343,800 and YOR offered $341,000. The bid proposals were evaluated by a 4-person HUD committee, and Selden received a score of 83 while YOR received a score of 103. The other three bids each received a zero on at least one of the criteria and therefore were all disqualified. HUD awarded the sale of the Selden Court Apartments to YOR, a white-owned realty company based in Grayling, Michigan, as the highest bidder which also had a score of 90 or more.

After YOR was awarded the sale, Selden filed a bid protest which was denied. Selden then brought the present action alleging that HUD had unlawfully discriminated against it on the basis of race in the bid evaluation and selection process. Selden originally sought to enjoin the sale to YOR but the injunction was denied. 2

The case was tried before a jury on December 7-11, 1984. At trial, members of the HUD committee testified as to the selection process. One committee member stated that Selden received a lower rating than YOR because the partnership did not have any direct experience in dealing with multi-unit HUD projects, as indicated by its proposal package. The same member testified that YOR's proposals for on-site management were superior to Selden's proposal. In the area of social management, another committee member testified that Selden received a lower rating than YOR because it had less experience in providing tenant services and in providing neighborhood involvement services. That member also testified that the committee did not know, at the time the bids were evaluated, the race of Selden nor did it consider whether YOR or Selden was comprised of white or black individuals. A third committee member testified that YOR received a higher rating in the area of financial strength of its purchasing plan because YOR had a greater net worth than Selden.

Selden sought to refute the committee's findings, particularly in the area of experience, in two ways. First, it emphasized that it had retained a managing firm experienced in managing Section 8 rentals to manage the Selden Court Apartments. This factor was known by the committee and was considered to be in Selden's favor. Second, Selden sought to illustrate YOR's poor performance in managing the apartments once it purchased them. The district court excluded all evidence pertaining to this topic, however.

In an attempt to show pretext, Selden sought to question a member of the HUD committee about whether multi-unit property had ever been sold in Detroit under HUD's Minority Business Enterprise Program. 3 The district court, however, sustained an objection to that question, determining that the focus of the case was on whether HUD discriminated in awarding the sale of the apartments to YOR, not whether HUD should have included the Selden Apartments in the Minority Business Enterprise Program.

At the close of all evidence, but before instructing the jury, the district court judge dismissed Selden's Secs. 1981 and 1982 actions for lack of jurisdiction on the ground that HUD had not waived its sovereign immunity with respect to actions under those statutes. 4 The jury was then instructed on Selden's claim of a violation of the Fair Housing Act, 42 U.S.C. Sec. 3601 et seq. On December 11, 1984, the jury found in favor of HUD and this timely appeal followed.

A. Sovereign Immunity

Selden claims that the district court erred in concluding, based on the doctrine of sovereign immunity, that it lacked jurisdiction over Selden's Secs. 1981 and 1982 actions. Selden argues that HUD has waived its sovereign immunity with respect to these actions because they fall within the purview of the "sue and be sued" provision of section 1 of the National Housing Act of 1934, 12 U.S.C. Sec. 1702. Section 1702 provides in pertinent part:

The powers conferred by this chapter shall be exercised by the Secretary of Housing and Urban Development.... The Secretary shall, in carrying out the provisions of this subchapter and subchapters II, III, V, VI, VII, VIII, IX-A, IX-B, and X of this chapter, be authorized, in his official capacity, to sue and be sued in any court of competent jurisdiction, State or Federal.

A similar provision was enacted as part of the Housing Act of 1948, 42 U.S.C. Sec. 1404a. 5 Section 1404a states that the United States Housing Authority, a predecessor of HUD, "may sue and be sued only with respect to its functions under this chapter, and sections 1501 to 1505 of this title."

Selden further relies on Baker v. F & F Investment Co., 489 F.2d 829 (7th Cir.1973). In Baker, plaintiffs brought suit against HUD, as well as several other federal agencies, pursuant to 42 U.S.C. Secs. 1981 and 1982, seeking actual and punitive damages. In response to HUD's defense of sovereign immunity, the Seventh Circuit held that HUD had consented to suit as indicated by the "sue and be sued" language of 12 U.S.C. Sec. 1702, and that the civil rights actions were properly brought against HUD. The court declined to distinguish between the type of relief sought, stating that "restrictions on the authority of a federal agency to be sued are not to be lightly implied." Id. at 834, citing FHA v. Burr, 309 U.S. 242, 245, 60 S.Ct. 488, 490, 84 L.Ed. 724 (1940). Based on the analysis and holding of Baker, Selden asserts that its Secs. 1981 and 1982 claims were improperly dismissed.

We disagree. It is a well-accepted principle that "[t]he United States, as sovereign, is immune from suit save as it consents to be sued ... and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 770, 85 L.Ed. 1058 (1941). A waiver of sovereign immunity "cannot be implied but must be unequivocally expressed." United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1503, 23 L.Ed.2d 52 (1969). Also, "limitations and conditions upon which the Government consents to be sued must be strictly observed and exceptions thereto are not to be implied." Soriano v. United States, 352 U.S. 270, 276, 77 S.Ct. 269, 273, 1 L.Ed.2d 306 (1957). There is some disagreement concerning whether waivers of sovereign immunity are to be construed strictly or liberally, 6 but we find it unnecessary to resolve that question, as our analysis is sufficiently clear from other principles.

The issue presented here, whether the "sue and be sued" clauses of 12 U.S.C. Sec. 1702 and 42 U.S.C. Sec. 1404a operate as a waiver of HUD's sovereign immunity with respect to Secs. 1981 and 1982 actions for damages, is one of first impression before this court. 7 Those provisions waive sovereign immunity for claims brought against HUD for violating substantive provisions of the...

To continue reading

Request your trial
92 cases
  • National State Bank of Elizabeth v. Gonzalez
    • United States
    • New Jersey Superior Court — Appellate Division
    • July 30, 1993
    ... ... Housing and Urban Development, Third-Party ... 335, 107 L.Ed.2d 324 (1989); Selden Apartments v. United States Dep't of Hous. and ... ...
  • Michigan Protection & Advocacy Service v. Babin
    • United States
    • U.S. District Court — Western District of Michigan
    • July 22, 1992
    ... ... have violated rights secured by the Fair Housing Amendments Act of 1988 ("FHAA"), 42 U.S.C. § ... , through Don Booth, MORC's Property Development Coordinator, that a written lease would be ... of equities in this country should lead us to the regimentation and the absolute control of ... Selden Apartments v. U.S. Dept. of Housing & Urban Dev., ... ...
  • State of Ohio v. U.S. Dept. of Energy
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • October 10, 1990
    ... ... us to determine whether the United States has waived ... but must be unequivocally expressed.' " Selden Apartments v. United States Dep't of Hous. and ... ...
  • Huertas v. East River Housing Corp.
    • United States
    • U.S. District Court — Southern District of New York
    • July 2, 1987
    ... ... by defendants in allocating apartments in buildings under their control. However, I ... Metropolitan Housing Development Corp., 558 F.2d 1283, 1290 (7th Cir.1977), ... Selden Apartments v. United States Department of Housing & Urban Development, 785 F.2d 152, 159 (6th Cir.1986) ... ...
  • Request a trial to view additional results
1 books & journal articles

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT