U.S. v. City of Birmingham, Mich., 82-1559

• Decision Date: 08 February 1984
• Docket Number: No. 82-1559,82-1559
• Citation: 727 F.2d 560
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. CITY OF BIRMINGHAM, MICHIGAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 560

727 F.2d 560

UNITED STATES of America, Plaintiff-Appellee, v. CITY OF BIRMINGHAM, MICHIGAN, Defendant-Appellant.

No. 82-1559.

United States Court of Appeals Sixth Circuit.

Argued Oct. 7, 1983.

Decided Feb. 8, 1984.

William M. Saxton, argued, Butzel, Long, Gust, Klein & Van Zile, Detroit, Mich., Dean G. Beier, Beier, Howlett, McConnell, McCann, Bloomfield Hills, Mich., for defendant-appellant.

Leonard R. Gilman, U.S. Atty., Detroit, Mich., William R. Yeomans, argued, Brian Heffernan, Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Before MERRITT, Circuit Judge, PHILLIPS, Senior Circuit Judge, and SPIEGEL, District Judge. ^*

PHILLIPS, Senior Circuit Judge.

This fair housing case was filed by the Civil Rights Division of the Department of Justice against the City of Birmingham, Michigan, charging that the City had prevented the development of racially integrated low-income senior citizen and family housing by Baldwin House, a private corporation, in violation of the Civil Rights Act of 1968 (the Fair Housing Act). 42 U.S.C. Secs. 3604(a) and 3617. ¹

In an opinion containing comprehensive findings of fact, District Judge Robert E. DeMascio issued an injunction restraining the City from interfering further with the efforts of Baldwin House, a non-profit corporation formed by members of five different Birmingham churches, to construct low-income family and senior citizen housing within the City of Birmingham.

Reference is made to the opinion of the district court, published in 538 F.Supp. 819 (E.D.Mich.1982) for a detailed recitation of pertinent facts. We affirm the judgment of the district court except for one modification in the injunction as hereinafter set forth in part VI of this opinion, infra.

I

Birmingham, a suburb of Detroit, Michigan, has a population of approximately 22,000, with a very small minority ratio. According to the 1980 federal census only forty-four (0.2%) of its citizens were black. The City of Birmingham was aware of an acute shortage of senior citizen housing as early as 1969. Attempting to meet this need, in 1975, after competitive bidding, the City accepted a proposal submitted by Baldwin House by which the City would sell to Baldwin House a recently acquired school site. The proposal called for the construction and management of 156 units (later reduced to 152) of senior citizen housing on the former site of the Baldwin School. Baldwin House proposed to finance construction through the Michigan State Housing Development Authority (MSHDA) and planned to seek tenant rent subsidies under the Section 8 program of the Department of Housing and Urban Development.

The sale required voter approval. At a referendum held April 5, 1976, the voters of the City overwhelmingly approved the sale of the Baldwin School site to Baldwin House. The district court found as follows:

On December 6, 1976, Birmingham entered into an agreement for the sale to Baldwin House of the former Baldwin School site. Paragraph I(G) of the agreement provided:

The City acknowledges that federal and state policy requires that non-elderly government assisted housing as well as assisted elderly housing be provided in each housing market area. Therefore, the City agrees it will consider such existing, rehabilitated and/or new housing as the Michigan State Housing Development Authority and/or U.S. Department of Housing and Urban Development shall reasonably require as a condition of providing financing and assistance to the Baldwin House project.

The agreement gave Baldwin House one year to obtain MSHDA financing. Thus, prior to signing the agreement, the City Commission knew that MSHDA would require some "family housing" as a condition for financing the construction of senior-citizen housing. City officials also knew that MSHDA would probably require some new construction of family housing.

On February 25, 1977, Baldwin House submitted its first request to MSHDA for financing the construction of family housing (50 units on one site with a possible additional 10 units on a second site). In March 1977, less than 90 days after the City signed its agreement with Baldwin House, MSHDA officials informed Mr. Watchowski, the City Grant Administrator, that, as part of its newly announced balanced housing policy, MSHDA would require one unit of low-income family housing for every two units of senior-citizen housing as a condition for financing construction of senior-citizen housing.

538 F.Supp. at 822 (footnotes omitted).

After numerous developments described in detail in the district court's opinion, 538 F.Supp. at 822 to 824, the district court found that "Soon after the public had been advised that Baldwin House intended to construct low-income family housing, opposition began to surface. Most of the opposition to the proposal centered on fears that family housing might introduce 'harmful elements' into Birmingham." 538 F.Supp. at 824. Opposition to low-income housing was expressed at meetings of the City Commission. Flyers were distributed throughout the City, vigorously attacking the Baldwin House plan. The district court found that "[r]esidents who opposed the Baldwin House proposal attended every Commission meeting between November 1977 and April 1978"; and that they expressed concern about "those people" coming to Birmingham. Id. The court concluded: "We find that when the group led by Nancy Elby referred to 'those people,' they were referring to black people." Id. The court found that the City Commission took action that supported opponents of the Baldwin House proposal by agreeing to defer a final vote on extending the Baldwin House contract and by adding several amendments to the proposed contract that made it impossible for Baldwin House to continue its negotiations successfully with MSHDA. Id. at 825.

An advisory referendum on the Baldwin House proposal was held on April 3, 1978, when three of the seven members of the City Commission stood for reelection. The Baldwin House proposal and the three incumbent Commissioners were defeated. Three candidates opposing the proposal were elected. The district court found:

The City's interference with the Baldwin House proposal culminated when on May 8, 1978 ... the three remaining Commissioners who supported the Baldwin House proposal were recalled from office. This newly composed Commission never took any action to repair the damage its practices and policies had done to the negotiations between MSHDA and Baldwin House. Even though the new Commission was aware that Baldwin House wanted its contract extended at least until September 1978, it took no action. It would have served no purpose for Baldwin House to again request an extension; it knew it had no support on the new Commission. A city that had actively interfered with the Baldwin House/MSHDA negotiations could now preclude construction of racially integrated family housing in Birmingham by simply doing nothing.

538 F.Supp. at 826.

The district court held that "the City's interference with the Baldwin House plan to construct low-income housing was, in fact, racially motivated." Id.

Judge DeMascio then articulated seven specific factors in support of his conclusion. These seven factors are set forth in the quotation in Part IV of this opinion, infra.

We find the conclusion of the district court on these seven factors to be supported by the record. Reference is made to the findings of fact of the district court for comprehensive details of evidence supporting the court's conclusion on these seven factors.

II

The City urges reversal of the judgment of the district court on the following grounds:

(1) The findings of fact upon which the district judge based his ultimate conclusion that the City blocked the Baldwin House development with a racially discriminatory intent is based upon hearsay evidence and are clearly erroneous;

(2) That the district court unlawfully inquired into the motives of voters who participated in the April 3, 1978 advisory referendum on the sale of the Baldwin school site to the Baldwin House group;

(3) That the district court erred in holding that the City acted with a discriminatory intent is erroneous and contrary to law; and

(4) That the remedy prescribed by the district court is not limited to the nature of the violation found.

We address each of these contentions in turn.

III

This court may set aside findings of fact of a district judge sitting without a jury only if the findings are "clearly erroneous." Fed.R.Civ.P. 52(a). To set aside such findings of fact, we must be left, after reviewing the entire record, "with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 541, 92 L.Ed. 746 (1948), reh'g denied 333 U.S. 869, 68 S.Ct. 788, 92 L.Ed. 1147 (1948). In making a decision as to whether a mistake has occurred, this court defers to the district court's determinations with respect to the credibility of witnesses. "Findings as to the design, motive and intent with which men act depend peculiarly upon the credit given to witnesses by those who see and hear them." United States v. Yellow Cab Co., 338 U.S. 338, 341, 70 S.Ct. 177, 179, 94 L.Ed. 150 (1949).

In a recent case also involving racial motivation of public officials in withdrawing support for a low-income housing project, Smith v. Town of Clarkton, 682 F.2d 1055, 1064-1065 (1982), the Fourth Circuit wrote:

Municipal officials acting in their official capacities seldom, if ever, announce on the record that they are pursuing a particular course of action because of their desire to discriminate against a racial minority. Even individuals acting from invidious motivations realize the unattractiveness of their prejudices when faced with their perpetuation in the public record. It is only in private conversation, with individuals assumed to share their bigotry, that open statements of discrimination are made, so...