IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

No. 95-30337

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LOUISIANA LANDMARKS SOCIETY, INC.,

Plaintiff-Appellee,

VERSUS

CITY OF NEW ORLEANS, RIVERGATE DEVELOPMENT CORPORATION,

and HARRAH’S JAZZ COMPANY, INC.,

Defendants-Appellants.

_________________________

Appeal from the United States District Court

for the Eastern District of Louisiana

_________________________

June 7, 1996

Before POLITZ, Chief Judge, HIGGINBOTHAM and SMITH, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

The C ity of New Orleans, the Rivergate Development Corporation, and Harrah’s Jazz Company (collectively, “the defendants”)

appeal an order granting Louisiana Landmarks Society (“Landmarks”)

a permanent injunction against them. Concluding that Landmarks had

no private cause of action to seek the injunction, we reverse,

vacate the injunction, and dismiss for failure to state a cause of

action.Title IV of the 1970 act enacted the open-space land program at issue

he re. Section 401, the only section in title IV, amended title VII of the

Housing Act of 1961. Section 401 replaced the existing text of title VII with

nine new sections numbered from 701 to 709. See 1970 U.S.C.C.A.N. at 2083-87.

These 700-series section numbers actually refer to sections of the 1961 act, the

sections added by the 1970 amendments. While Landmarks is formally suing under

§ 401 of the 1970 act, it is more convenient for us to cite to §§ 701-709 of the

1961 act SS

when referring to portions of the 1970 amendments SS than it would be to

cite to § 401 of the 1961 act. Thus, while we cite to sections of the 1961 act,

we are formally interpreting the 1970 amendments to the 1961 act.

This section states: “No open-space land involving historic or

architectural purposes for whic h assistance has been granted under this title

shall be converted to use for any other purpose without the prior approval of the

Secretary of the Interior.” HUD Act § 705. This section, while never repealed,

has been omitted from the United States Code because of the termination of the

grant program. See 42 U.S.C.A. § 1500c-1 (West 1994).

2 I.

In October 1971, the city applied for a federal open-space

land grant under title IV of the Housing and Urban Development Act

of 1970, Pub. L. 91-609, 84 Stat. 1770 (1970) (“HUD Act” or “Act”),

reprinted in 1970 U.S.C.C.A.N. 2069, 2083-87. 1 These grants were

provided for the creation and maintenance of open-space areas

inside urban centers. S ee HUD Act § 701. One of the uses for

which gran ts were available was for “historic and architectural

preservation.” See id. § 702(b)(4).

The grant application proposed that the city turn a parking

lot into the Joan of Arc Plaza, a public area that would showcase

a statue of Joan of Arc and a pair of cannons. The statue and

cannons were gifts from France. The city ultimately obtained the

grant and built the plaza.

Congress terminated the open-space land program in 1975, but

it did not explicitly repeal § 705. 2 This section required the

approval of the Secretary of the Interior SS not HUD SS

prior to the

conversion of grant-assisted sites involving “historic orLandmarks did not respond in its appellate brief to the defendants’

private-right-of-action argument, except for a single conclusionary reference in

the text of its brief and a single accompanying footnote. It contended that the

defendants had waived this argum ent below when they purported to waive their

standing argument.

W e cannot help but find Landmarks’s position puzzling. Standing is a

concept distinct from the concept of private rights of action. Furthermore, to

the extent that Landmarks erroneously analyzed the implied-cause-of-action

argument as a standing argument, it should have known that sta nding is

jurisdictional and, therefore, non-waivable. Landmarks’s decision to deem this

issue waived has left us with only the benefit of the defendants’ briefing and

argument.

3 architectural” purposes to uses other than those proposed in the

grant application. See id. § 705.

On December 5, 1994, bulldozers, under Harrah’s direction,

began clearing the Joan of Arc Plaza, but without harming the

statue or cannons. Landmarks obtained a temporary restraining

order (“TRO”) enjoining the defendants from converting the plaza to

something other than its allegedly historic purposes.

After a hearing, the district court i ssued a permanent

injunction, along the same lines as the TRO, against the

defendants. The defendants moved to amend the judgment so that it

would affect a narrow, precisely-defined area, and the court

granted this motion. The defendants now appeal the permanent

injunction, and Landmarks cross-appeals the amendment.

II.

It is undisputed that Congress did not expressly provide for

a private right of action in passing the HUD Act. If any such

cause of action exists, it must be one implied by the statute. The

defendants argue that the Act implied no such right of action. 3

Cort v. Ash

, 422 U.S. 66, 78 (1975), established a four-factor4

test for determining whether a federal statute implies a private

right of action:

(1) Is this plaintiff a member of the class for whose

“especial” benefit the statute was passed? In other

words, does the statute create a federal right for this

plaintiff?

(2) Is there any evidence of legislative intent, either

explicit or implicit, to create or deny a private remedy?

(3) Is it consistent with the legislative scheme to imply

a private remedy?

(4) Is the cause of action one traditionally relegated to

state law so that implying a federal right of action

would be inappropriate?

See also Resident Council of Allen Parkway Village v. HUD

, 980 F.2d

1043, 1053 (5th Cir.) (applying Cort test), cert. denied

, 114 S.

Ct. 75 (1993). Furthermore, the Court explained in Touche Ross &

Co. v. Redington , 442 U.S. 560 (1979), that the touchstone of the

Cort analysis is the second factor, Congressional intent. S ee id.

at 568; see also Allen Parkway

, 980 F.2d at 1054; Abate v. Southern

Pac. Transp. Co.

, 928 F.2d 167, 169 (5th Cir. 1991) (quoting

Thompson v. Thompson , 484 U.S. 174, 179 (1988)).

When analyzing a federal statute, we begin with the familiar

presumption “that Congress did not intend to create a private right

of action.” A llen Parkway

, 980 F.2d at 1053. Generally, a

plaintiff asserting an implied right of action under a federal

statute “‘bears the relatively heavy burden of demonstrating that

Congress affirmatively contemplated private enforcement when it

passed the relevant statute.’” Id. (quoting Victorian v. Miller

,

813 F.2d 718, 721 (5th Cir. 1987) (en banc)). Landmarks has failed

to carry this burden.5 A.

Under the first Cort factor, we ask whether the plaintiff

belongs to an identifiable class of persons upon whom the statute

has conferred a substantive right. Abate

, 928 F.2d at 169; s ee

Cannon v. University of Chicago

, 441 U.S. 677, 690 (1979). Even if

a plaintiff can demonstrate membership in suc h a class, however,

the crucial inquiry remains one of Congressional intent SS i.e.

,

whether Congress actually intended to create a private remedy. S ee

Thompson

, 484 U.S. at 179; Touche Ross

, 442 U.S. at 568; Abate

, 928

F.2d at 169 (quoting Thompson ). In answering the question of

Congressional intent, “as with any case inv olving the

interpretation of a statu te, our analysis must begin with the

language of the statute itself.” Touche Ross , 442 U.S. at 568

(citations omitted).

In this case, Landmarks cannot demonstrate that it is a

member of a class for whose special benefit the Act was passed. In

the Act’s statement of findings and purpose, Congress stated that

the grant program established under the Act was intended

to help curb urban sprawl and prevent the spread of urban

blight and deterioration, to encourage more economic and

desirable urban development, to assist in preserving

areas and properties of historic or architectural value,

and to help provide necessary recreational, conservation,

and scenic areas by assis ting State and local public

bodies in taking prompt action to [ inter alia ]

. . . acquire, improve, and restore areas, sites, and

structures of historic or architectural value . . . .

HUD Act § 701(d). To the extent that there might be an

identifiable class of “persons” mentioned in this statute, it would

consist of “[ s ]tate and local public bodies” SS not historicalWe emphasize that we are not suggesting that the statute implies a

private right of action in favor of state and local public bodies. Rather, we

simply point out that the only “persons” identified in the text of the statute

are state and local public bodies.

In contrast to the statute here, title IX of the Education Amendments of

(continued...)

6 preservation societies such as Landmarks. 4 This conclusion is

supported by the fact that the statute explicitly defines the terms

“State” and “local public body.” See HUD Act § 709.

It is both true and insufficient that historical preservation

societies are “ a class that stands to gain some benefit from the

regulations and penalties promulgated under these provisions.”

Abate

, 928 F.2d at 169. The statute, however, focuses on Landmarks

“only diffusely.” S ee id. In other words, it does not focus on

historical preservation societies any more than it “focuses” on

citizens at large.

Rather, the A ct’s provisions are framed “‘as a general

prohibition or a command to a federal agency.’” I d. (quoting

Uni versities Research Ass’n, Inc. v. Coutu , 450 U.S. 754, 772

(1981)). The Act directs the Secretary of Housing and Urban

Development (“HUD”) SS with some assistance from the Secretary of the

Interior SS to execute a regulatory scheme consisting of (1) federal

financial assistance to state and local public bodies and

(2) restrictions attached to that assistance. This grant program,

prior to its termination, sought to benefit urban areas and

communities generally. While Landmarks, like any ordinary citizen,

may derive an indirect benefit from the enforcement of the

regulatory scheme, that attenuated benefit 5 d oes not rise to the(...continued)

1972 SS the statute from which the Cannon Court inferred a private right of

action SS created a direct benefit for an i dentifiable class of persons: “No

person in the United States shall, on the basis of sex, be excluded from

participation in, be denied the benefits of, or be subjected to discrimination

under any education program or activity receiving Federal financial assistance.

. . .” 20 U.S.C. § 1681(a) (1990). This language has not been amended since the

decision in Cannon

.

In explaining the proposition that a stream of indirectly derived

benefits does not flow from a private cause of action, the Abate court offered

three supporting citations: Till v. Unifirst Fed. Sav. & Loan Ass’n , 653 F.2d

152, 158 (5th Cir. Unit A 1981); United States v. Capeletti Bros., Inc.

, 621 F.2d

1309, 1314 (5th Cir. 1980); and Rogers v. Frito Lay, Inc.

, 611 F.2d 1074, 1079-80

(5th Cir.), cert. denied , 449 U.S. 889, and cert. denied , 449 U.S. 889 (1980).

Abate

, 928 F.2d at 169. Prior to our decision in A bate

, we had characterized

these cases as “decisions in which this court denied private rights o f action

under statutes that imposed duties of enforcement upon federal departments and

agencies .” Hondo Nat’l Bank v. Gill Sav. Ass’n , 696 F.2d 1095, 1100 (5th Cir.

1983) (emphasis added).

7 level required to support implication of a private right of action.

See id. 6

Landmarks therefore has failed to e stablish that it falls

within an identifiable class of persons for whose special benefit

the Act was passed. Because Touche Ross instructs us that

Congressional intent is always the critical inquiry in an impliedright-of-action analysis, see 442 U. S. at 568, we consider that

Cort factor as well.

B.

The most telling indicator of Congressional intent regarding

this grant program is Congress’s termination of it as of January 1,

1975. S ee 42 U.S.C. § 5316(a) (1995) (pr ohibiting new grants or

loans after January 1, 1975, under SS inter alia SS title VII of the

Housing Act of 1961). While Congress did not explicitly repeal

§ 705 SS the provision governing conversion of grant-assisted land to

other uses SS it did decide to pursue a different legislative agenda8

regarding open-space land and to eliminate the grant program.

Given the Supreme Court’s gen eral disapproval of implied private

rights of action, it would be anomalous to infer one from a defunct

federal grant program.

Furthermore, the provisions of the statute are framed “‘as a

general prohibition or a command to a federal agency.’” A bate

, 928

F.2d at 169 (quoting Coutu

, 450 U.S. at 772). Like the statute at

issue in Abate

, this one “creates no rights in favor of

individuals”; rather, it “imposes duties on a federal agency and

grants the agency the power to fulfill those duties.” I d. Stated

concisely, the language of the HUD Act is “duty-creating,” not

“righ t-creating” like the statute in C annon

. S ee id. at 169 n.3

(quoting title IX of the Education Amendments of 1972 (“title IX”),

the statute from which the Cannon Court inferred a right of

action). And, as the C annon Court stated, “the right- or dutycreating language of the statute has generally been the most

accurate indicator of the propriety of implication of a cause of

action.” Cannon , 441 U.S. at 690 n.13.

Moreover, we must not overlook the fact that this is a federal

funding statute. As stated in the Act itself, Congress’s purpose

in enacting this statute was to “assist” state and local public

bodies in creating and maintaining open-space land in urban areas.

See HUD Act § 701(d). The statute created a grant program composed

of federal-state and federal-locality partnerships, each of which

properly was characterized as a c ontract between the federal

government and a state or local public body. Cf. Pennhurst StateNothing in Franklin v. Gwinnett County Pub. Sch.

, 503 U.S. 6 0 (1992),

diminishes the force of this language from P ennhurst as it applies here.

Franklin considered the availability of money damages as a remedy for violations

of title IX. S ee id. at 62-63. While the Court acknowledged that the language

from Pennhurst limited the remedies available under federal funding statutes in

cases of unintentional discrimination, it declined to extend that limitation to

cases of intentional discrimination. See id. at 74. This apparent limitation

of Pennhurst speaks only to the availability of remedies where a statutory right

of action already exists, as in the case of title IX. Indeed, as the Franklin

Court itself stated, “the question of what remedies are available under a statute

that provides a private right of action is ‘analytically distinct’ from the issue

of whether such a right exists in the first place.” I d. at 65-66 (quoting Davis

v. Passman

, 442 U.S. 228, 239 (1979)). Thus, nothing in F ranklin casts any doubt

on our general rule, see Allen Parkway

, 980 F.2d at 1052, that inferring private

rights of action from appropriations measures is disfavored.

9 Sch. and Hosp. v. Halderman , 451 U.S. 1, 17 (1981) (stating that

“legislation enacted pursuant to [Congre ss’s] spending power is

much in the nature of a contract”).

When dealing with a classic federal funding statute like this

one, infe rring a private right of action is disfavored: “[A]s a

general rule, courts have been reluctant to infer a congressional

intent to create private rights unde r appropriations measures.”

Allen Parkway

, 980 F.2d at 1052. Thus, courts generally should

decline to entertain claims by private persons that a state or

local public body is not complying with a federal-state contract.

“In legislation enacted pursuant to the spending power, the typical

remedy for state noncompliance with federally imposed conditions is

not a private cause of action for noncompliance but rather action

by the Federal Government to terminate funds to the State.”

Pennhurst , 451 U.S. at 28. 7

In this case, because federal funds were given to the city as

a one-time grant, Congress provided other means of enforc ing the

terms of the federal-state contract. It is apparent from the

structure and text of the statute that Congress committed10

administration of the grant program to the Secretary of HUD, who

w as to be assisted in some capacities by the Secretary of the

Interior. Sections 701 to 709 of the Act repeatedly refer to the

Secretary of HUD, carefully describing his duties in administering

the grant program. Conspicuously absent is any mention of private,

third-party enforcement of this contract between the federal

government and the city. Rather, enforcement of the terms of the

contract is committed to the executive authority of the Secretary

of HUD.

In Former Special Project Employees Ass’n v. City of Norfolk

,

909 F.2d 89 (4th Cir. 1990), the court held that the Model Cities

Act SS another HUD grant program SS did not imply a private right of

action. S ee id. at 92-93. The court cited approvingly cases from

the Ninth a nd Eleventh Circuits holding that “funding statutes

typically are not sufficiently focused on the benefiting class to

confer federal rights on the members of the class.” I d. at 92.

The court also quoted with a pproval the language from P ennhurst

disavowing implied private rights of action for noncompliance with

the terms of a federal-state contract. See id. at 93.

The structure and language of § 705 constitute overwhelming

evidence that Congress did not contemplate SS let alone

authorize SS

private enforcement of the open-space land program.

Where analysis of the first two Cort factors leads to the

conclusion that Congress did not intend to create a private right

of action, we need not address the other two Cort factors. S ee

California v. Sierra Club

, 451 U.S. 287, 298 (1981) (citing Touche11

Ross , 442 U.S. at 574-76).

We therefore hold that § 705 does not imply a private right of

action. Accordingly, we REVERSE, VACATE the permanent injunction,

and render a judgment of dismissal for failure to state a cause of

action. Landmarks’s cross-appeal regarding the scope of the

injunction is DISMISSED as moot.