Southend Neighborhood Imp. Ass'n v. St. Clair County

• Decision Date: 17 September 1984
• Docket Number: No. 83-1755,83-1755
• Parties: SOUTHEND NEIGHBORHOOD IMPROVEMENT ASSOCIATION, et al., Plaintiffs-Appellants, v. COUNTY OF ST. CLAIR, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1207

743 F.2d 1207

53 USLW 2185

SOUTHEND NEIGHBORHOOD IMPROVEMENT ASSOCIATION, et al Plaintiffs-Appellants, v. COUNTY OF ST. CLAIR, et al., Defendants-Appellees.

No. 83-1755.

United States Court of Appeals, Seventh Circuit.

Argued Oct. 21, 1983.

Decided Sept. 17, 1984.

Lois Wood, Land of Lincoln Legal Assistance Foundation, Inc., St. Louis, Ill., for plaintiffs-appellants.

Gary L. Bement, Asst. State's Atty., Belleville, Ill., for defendants-appellees.

Before BAUER and FLAUM, Circuit Judges, and PELL, Senior Circuit Judge.

BAUER, Circuit Judge.

The plaintiffs, seven not-for-profit community organizations in East St. Louis, Illinois, and five individual homeowners, sued the defendants, the County of St. Clair, the County Board, and sixteen of its members (collectively "the County"), alleging that County policies regarding treatment of tax delinquent properties discriminated against them and similarly situated blacks in St. Clair County.

The County Board, as trustee for the taxing districts in St. Clair County, regularly bids at sales of tax delinquent properties and obtains certificates of purchase and tax deeds for those properties. The complaint states that the County held more than 5,000 properties by tax deed at the time this suit was filed.

The plaintiffs allege in their class action complaint that the County failed to fulfill its obligation to maintain the properties it holds in predominately black neighborhoods. The plaintiffs claim that the County is obliged either to board up or demolish the dilapidated buildings on these properties. The plaintiffs allege that the County's breach of its obligations diminished the value of their own properties in these neighborhoods and prevented them from securing loans and making other contracts related to their properties.

The district court declined jurisdiction over this case on the basis of the Tax Injunction Act, 28 U.S.C. Sec. 1341 (1948), and the Pullman and Burford doctrines of abstention. ¹ The court stated that granting the relief the plaintiffs seek would constitute an impermissible intrusion into the County's ability to collect taxes. The court later denied a motion to vacate its order. The court determined that the plaintiffs have a plain, speedy, and efficient remedy under Illinois laws in state court for their claims against the County, and thus stayed the federal action pending the outcome of state court proceedings. The plaintiffs appealed the stay.

After oral argument on the abstention issues, we asked the parties to submit briefs addressing whether the complaint stated a claim upon which relief can be granted. We now hold that the complaint does not state a claim for relief and therefore remand with instructions that the claims be dismissed.

I

The plaintiffs first claim that the County violated Title VIII of the Civil Rights Act of 1968, 42 U.S.C. Secs. 3601-3619 (1978) (the Fair Housing Act), which forbids discrimination in making available or providing services related to housing.

The Fair Housing Act states in part that:

it shall be unlawful--

(a) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, or national origin.

(b) To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, or national origin.

42 U.S.C. Sec. 3604(a) & (b) (1974). Congress's purpose in enacting the Act was "to provide, within constitutional limitations, for fair housing throughout the United States." 42 U.S.C. Sec. 3601 (1968). Courts thus have applied the Act broadly within its terms. See, e.g., Trafficante v. Metropolitan Life Insurance Co., 409 U.S. 205, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972); Metropolitan Housing Development Corp. v. Village of Arlington Heights, 558 F.2d 1283 (7th Cir.1977), cert. denied, 434 U.S. 1025, 98 S.Ct. 752, 54 L.Ed.2d 772 (1978) (Arlington Heights II ). In Arlington Heights II, for example, this court determined that under certain circumstances a violation of Section 3604(a) can be established by a showing of the discriminatory effects of particular practices without a showing of discriminatory intent. The court noted, however, that not every action which produces discriminatory effects is necessarily illegal. 558 F.2d at 1290 (citing Brest, The Supreme Court, 1975 Term--Forward: In Defense of the Antidiscrimination Principle, 90 Harv.L.Rev. 1, 28-29 (1976)).

The issue in this case is whether the alleged County practices, assuming they occurred, ² violated the Fair Housing Act by "otherwise mak[ing] unavailable or deny[ing]" a dwelling to any person because of race or of discriminating "in the provision of services or facilities" in connection with the sale or rental of a dwelling. The complaint charges:

38. The County of St. Clair, at all times relevant to this action, with respect to property to which it holds a tax deed, and which is located in predominantly black areas, (1) has failed and refused to comply with its statutory obligation to prevent waste on any of the premises involved, and to ensure that the premises are maintained in good condition and repair, that the subject property is preserved, and that the public's safety, with respect to such property, is protected; (2) has failed and refused to comply with its obligations under local ordinances to demolish all unsafe buildings on such property; and (3) has failed and refused to comply with its obligation to maintain that property in such a manner that the health and welfare of residents of the surrounding neighborhood is not endangered.

The Fair Housing Act prohibits both direct discrimination and practices with significant discriminatory effects. For example, although Section 3604(a) applies principally to the sale or rental of dwellings, courts have construed the phrase "otherwise make unavailable or deny" in subsection (a) to encompass mortgage "redlining," insurance redlining, racial steering, exclusionary zoning decisions, and other actions by individuals or governmental units which directly affect the availability of housing to minorities. ³ Of course, the alleged illegal actions must lead to discriminatory effects on the availability of housing. See United States v. Youritan Construction Co., 370 F.Supp. 643, 648-49 (N.D.Cal.1973), aff'd, 509 F.2d 623 (9th Cir.1975). The Act is concerned with ending racially segregated housing. See Woods-Drake v. Lundy, 667 F.2d 1198 (5th Cir.1982). Section 3604(a) applies to the availability of housing. That section thus is violated by discriminatory actions, or certain actions with discriminatory effects, that affect the availability of housing.

The plaintiffs claim that the County's discriminatory refusal to properly manage the properties it owns damaged their interests in neighboring properties. This claim is quite different from most of the practices that courts have deemed illegal under Section 3604(a). Courts have applied this subsection to actions having a direct impact on the ability of potential homebuyers or renters to locate in a particular area, and to indirectly related actions arising from efforts to secure housing. See, e.g., Dillon v. AFBIC Development Corp., 597 F.2d 556 (5th Cir.1979); Williams v. Matthews Co., 499 F.2d 819 (8th Cir.), cert. denied, 419 U.S. 1021 & 1027, 95 S.Ct. 495 & 507, 42 L.Ed.2d 294 & 302 (1974). On the other hand, the plaintiffs here do not allege that they have been hindered in an effort to acquire a dwelling, but rather that the County's conduct toward certain properties damaged their own property.

We hold that the County's actions here could not have affected the availability of housing in a manner implicating Section 3604(a) of the Fair Housing Act. Section 3604(a) is designed to ensure that no one is denied the right to live where they choose for discriminatory reasons, but it does not protect the intangible interests in the already-owned property raised by the plaintiffs allegations.

Similarly, the Section 3604(b) prohibition against discrimination in the provision of services or facilities in connection with the sale or rental of a dwelling does not encompass the plaintiffs' allegations. That subsection applies to services generally provided by governmental units such as police and fire protection or garbage collection; the County decisions regarding how to administer properties it holds by tax deeds are distinct from these types of services. See Mackey v. Nationwide Insurance Cos., 724 F.2d 419, 423-24 (4th Cir.1984). ⁴

The complaint states that a large majority of blacks live in concentrated areas in St. Clair County. The plaintiffs claim that the County is but one of many entities discriminating against them. Yet, whether practices of landlords, bankers, real estate brokers, insurers, or governmental units, including other practices of the County, violate the Fair Housing Act is not material to this case. Here we have only a claim that the County's inaction regarding certain properties violated Section 3604. The Act was not designed to address the concerns raised by the complaint.

II

The plaintiffs next claim that the County violated Sections 1982 and 1981. Section 1982, which derived from Section 1 of the Civil Rights Act of 1866 and was codified into its present form in 1874, prohibits racial discrimination in the sale and rental of real property. The statute ensures that blacks have real property rights equal to whites. Jones v. Alfred Mayer Co., 392 U.S. 409, 443, 88 S.Ct. 2186, 2205, 20 L.Ed.2d 1189 (1968). Although Section 1982 is not a comprehensive housing law and does not encompass many of the specific prohibitions in the Fair Housing Act, Jones, 392 U.S. at 413-17, 88 S.Ct. at 2189-91, it applies to all racially motivated...