Source: https://law.justia.com/cases/federal/appellate-courts/F2/694/1196/116821/
Timestamp: 2020-07-04 16:46:35
Document Index: 347741554

Matched Legal Cases: ['§ 1701', '§ 1437', '§ 4601', '§ 4621', '§ 4622', '§ 4601', '§ 4601', '§ 4601', '§ 4625', '§ 4621', '§ 4601', '§ 4601', '§ 4601', '§ 281', '§ 291', '§ 4601', '§ 4633', '§ 5301', '§ 5301', '§ 1437', '§ 1437', '§ 4601']

Nancy Isham, on Behalf of Martha Bryant, Deceased, and Bethstrobel, Deceased, Individually and on Behalf Ofall Other Persons Similarly Situated,plaintiffs- Appellants, v. Samuel Pierce,* in His Official Capacity Assecretary of the United States Department of Housing Andurban Development; Henry Dishroom, in His Official Capacityas San Francisco Area Manager of the United Statesdepartment of Housing and Urban Development; and Ywcaapartments, Inc., a California Non- Profit Corporation,defendants-appellees, 694 F.2d 1196 (9th Cir. 1982) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Ninth Circuit › 1982 › Nancy Isham, on Behalf of Martha Bryant, Deceased, and Bethstrobel, Deceased, Individually and on Be...
Nancy Isham, on Behalf of Martha Bryant, Deceased, and Bethstrobel, Deceased, Individually and on Behalf Ofall Other Persons Similarly Situated,plaintiffs- Appellants, v. Samuel Pierce,* in His Official Capacity Assecretary of the United States Department of Housing Andurban Development; Henry Dishroom, in His Official Capacityas San Francisco Area Manager of the United Statesdepartment of Housing and Urban Development; and Ywcaapartments, Inc., a California Non- Profit Corporation,defendants-appellees, 694 F.2d 1196 (9th Cir. 1982)
US Court of Appeals for the Ninth Circuit - 694 F.2d 1196 (9th Cir. 1982) Argued and Submitted Dec. 15, 1982. Decided Dec. 20, 1982
The development and construction of the Apartment Conversion Project was to be financed entirely through a direct low interest loan in the amount of $5,593,900 to Apartments, Inc. from HUD pursuant to Section 202 of the Housing Act of 1959, 12 U.S.C. § 1701q. In addition, Apartments, Inc. received a grant from the City of San Francisco of HUD Community Development Block Grant ("CDBG") funds in the amount of $642,000.3 All of the apartment units are to be allocated rent subsidy payments from HUD under Section 8 of the Housing Act of 1937, as amended, 42 U.S.C. § 1437f.4 The amount of HUD's annual Section 8 funds reservation for the project is $774,996. Pursuant to regulations promulgated by HUD, Apartments, Inc.'s project must conform with HUD specifications.
An enormous amount of reconstruction was required in order to rehabilitate the Residence Club building and convert approximately 160 sleeping rooms into 98 apartments. It was therefore necessary for the YWCA to vacate the building during the renovation. The Secretary of HUD determined that the existing tenants were not eligible for the benefits provided by the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. §§ 4601-4655 ("URA"), and, therefore, the appellants' moving expenses were not subject to federal relocation assistance.
Apartments, Inc. filed a motion to dismiss the complaint under Federal Rules of Civil Procedure, Rule 12(b) (6). The district court concluded that the complaint failed to state a claim upon which relief could be granted against Apartments, Inc. because (1) the subject project was owned and operated by a private party and no applicable law provided for relocation assistance or benefits for persons displaced by such projects, and (2) plaintiffs had not, and could not, allege any facts that would give rise to a claim against Apartments, Inc. under the Fifth Amendment of the United States Constitution. The court also determined that the allegations of other facts consistent with the complaint could not possibly cure the foregoing deficiencies.
42 U.S.C. § 4621. The operative provisions of the URA guarantee relocation assistance, moving expenses, dislocation allowances and, in some cases, payments for replacement housing to "displaced persons." See 42 U.S.C. §§ 4622, 4623, 4625, 4630.
42 U.S.C. § 4601(6).
It is appellants' contention that the plain language of 42 U.S.C. § 4601(6) indicates that the test is whether the acquisition is for a federal program or project undertaken by a federal agency, or with federal financial assistance. They cite numerous provisions of the URA for the proposition that there is nothing in the statutory framework which imposes a requirement that the acquisition must be by a government entity nor is there language which excludes federal programs or projects in which private parties participate.6
Appellees contend that the language in 42 U.S.C. § 4601(6), "as a result of the acquisition of such real property, ... or as a result of the written order of the acquiring agency to vacate real property, for a program or project undertaken by a federal agency, or with federal financial assistance," indicates that the Act contemplates an acquisition by an agency of the federal government or of the state or local government. Appellees assert that if Congress intended to include acquisitions by private parties, then Congress would have inserted the word "entity" for the term "agency" to allow relocation assistance to displaced persons when private action is involved.
The statutory framework of the URA demonstrates that the Act applies only to those situations where one is displaced by a federal or state agency. 42 U.S.C. § 4625(b) provides:
Sections 4627 and 4628 of Title 42 mandate benefits " [w]henever real property is acquired by a State agency" incidental to a federal program. Section 4628 specifically provides that the acquisition of real property by a state agency at the request of a federal agency for a federal program or project shall be deemed an acquisition by a federal agency for the purpose of the URA. It appears that if Congress had intended the URA to cover private developments receiving HUD loans, then these sections would have been the appropriate place to state that such a private acquisition would be deemed an acquisition within the meaning of the URA.
Upon review of the legislative history of the Act and the subsequent attempts to amend the Act, it appears that benefits for displaced persons under the URA are to apply only to persons displaced by a federal agency, state agency or local governmental body. Despite the broad language of 42 U.S.C. § 4621, the operational sections of the Act are more narrowly drawn. Appellants have not been displaced by the acquisition of real property by a federal or state agency nor have appellants been provided with written notice to vacate by a federal or state agency with the power of eminent domain.
Various circuit courts have dealt with similar issues as to whether the URA provides benefits to individuals displaced by private institutions funded by federal loans or grants. In Moorer v. HUD, 561 F.2d 175 (8th Cir. 1977), cert. denied, 436 U.S. 919, 98 S. Ct. 2266, 56 L. Ed. 2d 760 (1978), displaced tenants sought relocation benefits when they were forced to vacate apartments because of rehabilitation work required on buildings by a private party which had received federal financial assistance under section 236 of the National Housing Act in the form of rent subsidy payments and FHA mortgage insurance. The court held that tenants displaced by private acquisitions and private orders to vacate on projects funded by federal financial assistance were not "displaced persons" entitled to relocation benefits under the URA. Id. at 183.
In Conway v. Harris, 586 F.2d 1137 (7th Cir. 1978), tenants were evicted by a private party who was developing a senior citizens housing project. The private party contracted with HUD to receive Section 8 housing assistance payments following completion of the new housing construction. The issue presented was whether a person dispossessed from real property by a private acquisition, which leads to the construction of a Section 8 housing project, is a "displaced person" under 42 U.S.C. § 4601(6). The Seventh Circuit indicated that the criteria for determining if a person was entitled to relocation benefits was whether the property was acquired by a federal or state agency and whether a written order to vacate the premises was issued by a federal or state agency. The court concluded:
In this case the private entity Architektur-80 acquired the property from a private party, and a private entity issued the plaintiff a written order to vacate the premises. Thus plaintiff plainly fails both the acquisition and notice tests of 42 U.S.C. § 4601(6). Architektur-80 negotiated with the Wisconsin Finance Authority so that following the completion of the new housing project for the elderly, Architektur-80 would receive Section 8 rental assistance payments from HUD. These facts demonstrate a series of private, not governmental, decisions. Although there is some degree of federal and state involvement, we must reject plaintiff's fanciful causation theory that the government somehow acquired the property.
586 F.2d at 1141. As in Conway, it is equally clear that appellants have failed both the acquisition and notice tests as set forth in 42 U.S.C. § 4601(6).
Appellants assert that the project is covered by the URA because it is a program undertaken with federal financial assistance within the meaning of the Act.7 Notwithstanding the fact that there was no governmental acquisition or notice to vacate by a governmental body, appellants argue that the financial assistance to Apartments, Inc. provides a nexus of federal involvement to transform the acquisition into a federal project. Appellants claim that the URA coverage extends to those situations where tenants are displaced by a private party who receives federal financial assistance. This argument has been addressed by the Ninth Circuit in Austin v. Andrus, 638 F.2d 113 (9th Cir. 1981). In Austin, the Ninth Circuit approved of Moorer v. HUD, 561 F.2d 175 (8th Cir. 1977), cert. denied, 436 U.S. 919, 98 S. Ct. 2266, 56 L. Ed. 2d 760 (1978), which rejected the argument that a federal agency's degree of involvement through financial assistance could transform the acquisition into a federal program or project.
Relocation benefits for displaced tenants resulting from projects undertaken with federal financial assistance apply only when federal financial assistance is provided to a state agency which acquires real property or gives notice to vacate. In Parlane Sportswear Co., Inc. v. Weinberger, 513 F.2d 835 (1st Cir.), cert. denied, 423 U.S. 925, 96 S. Ct. 269, 46 L. Ed. 2d 252 (1975), Tufts University purchased a building from Parlane but continued to lease the premises to Parlane. The National Institute of Health, a subsidiary division of HEW, awarded substantial grants to Tufts under 42 U.S.C. §§ 281 et seq. and 42 U.S.C. §§ 291 et seq. for personnel, equipment, alterations and renovations to expand Tufts' medical teaching facilities and to establish a cancer research center. Tufts evicted Parlane who subsequently sought relocation assistance from HEW under the URA. Parlane argued that the phrase "federal financial assistance" appearing in the statutory definition of displaced persons, 42 U.S.C. § 4601(6), demonstrated an intent to include all projects which receive federal funds. The court determined that the phrase "Federal financial assistance" was intended to cover only such assistance to state agencies. Id. at 837; cf. Dawson v. United States Department of Housing and Urban Development, 428 F. Supp. 328 (N.D. Ga. 1976), affd., 592 F.2d 1292 (5th Cir. 1979). This conclusion is reinforced by 42 U.S.C. § 4633(b) (3) which provides:
Appellants contend that since the apartment conversion project is financed in part by a $642,000 grant of CDBG funds which the City of San Francisco received from HUD pursuant to 42 U.S.C. §§ 5301 et seq., appellants should receive benefits because HUD granted funds to the City for its development needs which in turn granted the funds to Apartments, Inc.8 Appellants ignore the fact that the URA is only applicable when the federal financial assistance is provided to a state agency for a specific program or project. CDBG funds are provided to local governments to use at their discretion as long as their use is consistent with the guidelines established by the underlying statute or applicable regulations. In Young v. Harris, 599 F.2d 870 (8th Cir.), cert. denied, 444 U.S. 993, 100 S. Ct. 526, 62 L. Ed. 2d 423 (1979), the private developer received, in addition to mortgage insurance, the right to exercise the power of eminent domain, property tax abatements, and a commitment from the City of St. Louis to contribute CDBG funds. The Eighth Circuit rejected the argument that appellants assert here, indicating that the grant of the funds to a private developer did not render the private developer's project a joint undertaking for which relocation assistance under the URA was applicable. The court concluded that " [i]n any event, federal financial assistance to a private project is insufficient to bring the project into the realm of the URA." Id. at 878. There is nothing in the URA or the legislative history of the Act to suggest a conclusion to the contrary. Had the City of San Francisco acquired the property or issued a notice to vacate, then appellants would be in a different posture.
The preliminary proposal submitted by a borrower to HUD must include: " [a] statement whether the proposed project will displace site occupants. If so, the Proposal shall ... establish that there is a feasible plan for relocation and shall include how any necessary relocation will be funded." 24 C.F.R. Sec. 885.310(h) (1977).
The CDBG program is authorized pursuant to Title I of the Housing and Community Development Act of 1974, 42 U.S.C. §§ 5301 et seq
The Section 8 program was established by Congress as part of the Omnibus Housing and Community Development Act of 1974, 42 U.S.C. §§ 1437f et seq., and was created to alleviate the acute shortage of decent, safe and sanitary dwellings for lower income families. Section 8 was designed to provide a profit incentive for private developers to participate in the construction and management of lower income housing by using monthly housing assistance payments in the form of rent subsidies. These payments subsidized the owner with the difference between the fair market value of the rental unit and approximately 25 percent of the renter's monthly income. See 42 U.S.C. §§ 1437f(b) (2), (c) (3); 24 C.F.R. Secs. 883.204, 883.204-.206 (1977)
42 U.S.C. § 4601(4) defines federal financial assistance to include a "grant, loan or contribution." Apartments, Inc. has received a loan under Section 202, subsidized rents under Section 8, and CDBG funds derived from a HUD grant to the City of San Francisco
24 C.F.R. Sec. 570.3(f) (1977) defines a Community Development Program as " [t]he program formulated by the applicant in its application to HUD ... which (1) includes the activity to be undertaken to meet its community development needs and objectives identified in its summary community development plan." The apartment conversion project must be consistent with San Francisco's plan, required by HUD, which describes the projects as strategies to be undertaken by the City with CDBG funds. See 24 C.F.R. Secs. 570 (1977) et seq
There are Section 8 regulations which do authorize relocation benefits, but they expressly state that such benefits shall be provided pursuant to the URA. However, these regulations were promulgated in 1978 which is after the time frame relevant to the issues of this case. See 24 C.F.R. Secs. 881.209(G) (8), 883.210(b), 883.712 (1978) (these regulations relate to PHA-owned Public Housing Agency Projects in which there is a governmental nature to the projects which is absent in the instant case)