Society Hill Civic Ass'n v. Harris

• Decision Date: 25 August 1980
• Docket Number: No. 79-2361,79-2361
• Citation: 632 F.2d 1045
• Parties: SOCIETY HILL CIVIC ASSOCIATION, Mrs. James Dugan, Mrs. Hebe Dick Baldwin, Herman and Reba Miller, Jack and Beatrice Weinstein, Morris and Betty Kratz, Ethel and Arthur Kratchman, Mrs. Simon Hymowitz, Mrs. Joseph Apilungo, Mrs. Isadore Levin, Appellants, v. Patricia Roberts HARRIS, Secretary, Thomas C. Maloney, Regional Administrator, Region III, Robert J. Clement, Acting Area Director, Philadelphia Area Office, all of the United States Department of Housing & Urban Development, the United States Department of Housing & Urban Development, Augustine Salvitti, Executive Director of the Philadelphia Redevelopment Authority, and the Philadelphia Redevelopment Authority, Appellees, Mable Dodson, Florence Hayes, Dorothy Miller, Evelyn Powell and Marlene Weber, Intervenor-Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 1045

632 F.2d 1045

SOCIETY HILL CIVIC ASSOCIATION, Mrs. James Dugan, Mrs. Hebe

Dick Baldwin, Herman and Reba Miller, Jack and Beatrice

Weinstein, Morris and Betty Kratz, Ethel and Arthur

Kratchman, Mrs. Simon Hymowitz, Mrs. Joseph Apilungo, Mrs.

Isadore Levin, Appellants, v. Patricia Roberts HARRIS, Secretary, Thomas C. Maloney,

Regional Administrator, Region III, Robert J. Clement,

Acting Area Director, Philadelphia Area Office, all of the

United States Department of Housing & Urban Development, the

United States Department of Housing & Urban Development,

Augustine Salvitti, Executive Director of the Philadelphia

Redevelopment Authority, and the Philadelphia Redevelopment

Authority, Appellees,

Mable Dodson, Florence Hayes, Dorothy Miller, Evelyn Powell

and Marlene Weber, Intervenor-Appellees.

No. 79-2361.

United States Court of Appeals, Third Circuit.

Argued March 24, 1980.

Decided Aug. 25, 1980.

Olan B. Lowrey (argued), Philadelphia, Pa., for appellants.

Sally Akan (argued), Pepper, Hamilton & Scheetz, Philadelphia, Pa., Harold R. Berk, Community Legal Services, Inc., Philadelphia, Pa., for individual appellees.

Peter F. Vaira, U. S. Atty., Walter S. Batty, Jr., Asst. U. S. Atty., Antoinette R. Stone (argued), Asst. U. S. Atty., Philadelphia, Pa., for appellee Patricia R. Harris, et al.

Before ROSENN, GARTH and SLOVITER, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge.

Society Hill is a fashionable neighborhood in Philadelphia. The Society Hill Civic Association (the Association) is a group of property owners residing in that neighborhood. The United States Department of Housing and Urban Development (HUD) and the Philadelphia Redevelopment Authority (RDA) are cooperating to build a small number of units of low-income housing in Society Hill. HUD and RDA are bound to fund this housing under the terms of a consent decree entered in an earlier litigation, Dodson v. Salvitti, No. 74-1854 (E.D.Pa.1977), aff'd mem., 571 F.2d 571 (3d Cir.), cert. denied, 439 U.S. 883, 99 S.Ct. 222, 58 L.Ed.2d 195 (1978).

In the instant suit, the Association and several individual homeowners seek to attack the prior consent decree. Judgment on the pleadings was granted by the district court in favor of the defendants, HUD, RDA and various officials of those agencies. The Association and the individual plaintiffs now appeal this determination. ¹

Because we conclude that, on the present record, the Association's action cannot be deemed to be barred by the prior consent decree, and because we find that the Association's complaint sets forth a number of claims inappropriate for disposition by judgment on the pleadings, we reverse the district court's judgment and remand for further proceedings.

I.

This case illustrates the unfortunate hostility and distrust that is often generated by urban renewal. The Association, plaintiff below and appellant here, represents the interests of property owners who seek to preserve property values and a perceived quality of life in Society Hill. The defendants, HUD and RDA, are two government agencies responsible for funding the urban renewal project that the Association claims will infringe its members' rights. The intervenors, Mable Dodson and others, are the tenants who are to be allocated urban renewal housing under the prior consent decree entered into by HUD, RDA, and themselves.

This case is the third in a series of related cases carrying forward the dispute over urban renewal in Society Hill. Initially, the tenants' landlord, a nonprofit housing corporation called the Octavia Hill Association, sought to evict them, the tenants, from their homes to allow rehabilitation of the property. Octavia Hill brought six actions in ejectment in the state courts of Pennsylvania. After removal to federal district court, a consent decree was entered into which provided that the tenants would surrender possession of their tenancies in return for, among other things, temporary housing as well as RDA's promise to attempt to rehabilitate certain property on Pine Street in Society Hill as a permanent relocation resource. Octavia Hill Association, Inc. v. Hayes (Dodson), Nos. 73-1594 to -1599 (E.D.Pa. Oct. 16, 1973). Eventually, a further court order was entered on June 28, 1974 to enforce the Octavia Hill consent decree.

Subsequently the tenants filed a class action ² in federal district court against HUD and RDA complaining of their failure to carry out their obligations under various federal constitutional and statutory provisions to provide the tenants with permanent relocation housing. ³ This litigation was captioned Dodson v. Salvitti. Class certification in this tenants' action was denied. A motion for intervention by local property owners (neighbors of those represented by the Association in the present case) was denied on grounds of untimeliness and lack of a legal interest sufficient to support intervention. Dodson v. Salvitti, 77 F.R.D. 674 (E.D.Pa.1977). Ultimately a second consent decree was approved in Salvitti providing for permanent housing for the tenants in new units to be constructed through the joint efforts of HUD and RDA. Dodson v. Salvitti, No. 74-1854 (E.D.Pa. Sept. 16, 1977), aff'd mem., 571 F.2d 571 (3d Cir.), cert. denied, 439 U.S. 883, 99 S.Ct. 222, 58 L.Ed.2d 195 (1978). No such relief had been provided in the earlier Octavia Hill consent decree.

The present action challenges the Salvitti consent decree. The Association brought suit against HUD and several of its officers, and against RDA and its executive director, Augustine Salvitti. Several of the tenants intervened as defendants. The Association claimed, first, that the Dodson consent decree was illegal because it was collaterally barred by the Octavia Hill consent decree, and second, that the Dodson consent decree was independently violative of various federal constitutional provisions and various state and federal statutes and regulations. The district court dismissed the entire action on the pleadings, under Fed.R.Civ.P. 12(c), on two independent grounds. The district court held that the Association's action constituted an impermissible collateral attack on a valid consent decree, since it concluded that the Association should have intervened in Dodson v. Salvitti to protect its interests. Alternatively, the district court held that the Association's complaint failed to state any claims upon which relief could be granted. This appeal followed.

II.

Initially, we must determine as a matter of law whether the Association's action is barred by the collateral estoppel effect of the consent decree entered by the court in Dodson v. Salvitti. We begin with the familiar principle set forth by Chief Justice Stone for the Supreme Court in Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115, 85 L.Ed. 22 (1940):

It is a principle of general application in Anglo-American jurisprudence that one is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process. A judgment rendered in such circumstances is not entitled to the full faith and credit which the Constitution and statute of the United States prescribe, and judicial action enforcing it against the person or property of the absent party is not that due process which the Fifth and Fourteenth Amendments require.

311 U.S. at 40-41, 61 S.Ct. at 117 (citations omitted).

The Association and the individual plaintiffs here claim the benefit of this principle: they were not parties to the Salvitti suit, and they allege that the judgment there entered constitutes an adverse determination of various constitutional, statutory and regulatory rights that they possess. If not allowed to attack the legality of the Salvitti consent decree, they argue, they will have been denied due process of law. ⁴ See Consumers Union v. Consumer Product Safety Commission, 590 F.2d 1209, 1217-18, 1221 (D.C.Cir.1978) (requester of information under Freedom of Information Act not bound by judgment in reverse-FOIA suit to which it was not a party), rev'd on other grounds sub nom. GTE Sylvania, Inc. v. Consumers Union, 445 U.S. 375, 100 S.Ct. 1194, 63 L.Ed.2d 467 (1980).

The defendants invoke the strong interest in the finality of judgments to bar the collateral attack. They properly point out that if there were an unqualified right on behalf of persons not parties to a suit to relitigate the merits of the judgment by means of a second suit, the interest in finality would be seriously undermined. Thus, they rely on the district court decision in Oburn v. Shapp, 70 F.R.D. 549 (E.D.Pa.), affirmed without opinion by this court, 546 F.2d 418 (3d Cir. 1976), cert. denied, 430 U.S. 968, 97 S.Ct. 1650, 52 L.Ed.2d 359 (1977), for the proposition that a collateral challenge may not be raised in these circumstances.

We agree with the defendants that a concern for the finality of judgments demands some limitations on the availability of collateral attack. We also accept the balance struck in Oburn between the competing interests in finality and an individual's right not to be bound by the judgment in a case to which he was not a party. But, even applying the Oburn approach here, we find that due process demands that the Association be allowed its challenge, and that the district court erred in precluding it.

Oburn presented an attack on a consent decree entered in an earlier litigation in which Pennsylvania agreed to increase minority hiring and promotion in the state police. The plaintiffs in Oburn were unsuccessful white applicants to the state police, who alleged that the earlier consent decree infringed their federal and state constitutional rights. The district court held that the plaintiffs would not be allowed to collaterally attack the earlier decree.

In support of their position that a separate action is maintainable, plaintiffs have cited the Court to the case of Hansberry v. Lee, 311 U.S. 32, 61...