Source: https://law.justia.com/cases/federal/appellate-courts/F2/469/616/79912/
Timestamp: 2020-08-15 07:53:46
Document Index: 516581030

Matched Legal Cases: ['§ 1441', 'Art. 15', '§ 1460', '§ 1455', '§ 1441', 'Art. 15', '§ 1292', '§ 1983']

Patricia Male et al., Appellees, v. Crossroads Associates et al., Appellants, 469 F.2d 616 (2d Cir. 1972) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Second Circuit › 1972 › Patricia Male et al., Appellees, v. Crossroads Associates et al., Appellants
Patricia Male et al., Appellees, v. Crossroads Associates et al., Appellants, 469 F.2d 616 (2d Cir. 1972)
U.S. Court of Appeals for the Second Circuit - 469 F.2d 616 (2d Cir. 1972) Argued Oct. 17, 1972. Decided Nov. 10, 1972
A full understanding of the factual background of this litigation will be helpful at the outset. In the early 1960's, officials of the City of Peekskill, like those of many other urban communities in the nation, realized that the rapidly deteriorating condition of the city would require a massive recovery effort to avert total blight. Accordingly, Peekskill began development of an urban renewal plan designed to take advantage of available state and federal funding. After the plans had begun to take shape, the Peekskill Urban Renewal Agency was created by the New York legislature in 1964. The Agency, which consists of the Mayor and the six Common Council members of Peekskill, entered into capital grant contracts with the United States Housing and Home Finance Administration (now the Department of Housing and Urban Development) and the New York State Division of Housing and Community Renewal. The basic intention was to replace dilapidated structures which had outlived their usefulness with new commercial and residential buildings designed to revitalize the downtown area. The statutory scheme provided that the net project cost-the total dollar amount expended to acquire and prepare the site less proceeds from the sale of acreage to private developers-would be funded two-thirds by the federal government and one-third by state and local agencies. See 42 U.S.C. §§ 1441 et seq.; N.Y.Gen.Mun. Law Art. 15 & 15A (McKinney's Consol.Laws, c. 24, 1965). The actual acquisition of the land was effectuated by exercise of Peekskill's power of eminent domain. See 42 U.S.C. § 1460(c); N.Y. Gen.Mun.Law Secs. 554(6), 555 (McKinney 1965).
A vital part of the Peekskill plan, known as the Academy Street Renewal Project, was the construction of middle income apartment residences. The plan contemplated that the construction and ownership of this housing would be undertaken by a private developer. Accordingly, on November 25, 1968, the Agency, acting on behalf of the city, entered into a contract with Crossroads Associates, a partnership organized by David and Muriel Bogdanoff. The contract provided that Crossroads would pay Sec.182,100 for two parcels of land in the Academy Street Project area. Crossroads bound itself to use the land in accordance with the renewal plan at least until 1990. The Agency undertook to demolish and remove any structures on the property, remove any existing streets, fill, grade and level the land, construct new streets and sidewalks, install all necessary utilities, and provide parking facilities at its own expense. Moreover, the Agency assumed the cost of relocating those persons displaced by the project. See 42 U.S.C. § 1455(c); N.Y. Gen.Mun.Law Secs. 503(i), 505(4) (e) (McKinney 1965).
In addition to these specific provisions, the entire project was governed by a phalanx of state and federal regulations. See, e. g., 42 U.S.C. §§ 1441 et seq.; HUD Urban Renewal Handbook; N.Y.Gen.Mun.Law Art. 15 & 15A (McKinney 1965). These regulations are designed to insure that the private developer proceeds in accordance with general standards set for urban renewal projects and with the specific renewal plan of the community. Thus, a provision of the contract provided that Crossroads shall "Devote the Property to, and only to and in accordance with, the uses specified in the Urban Renewal Plan." And, the agreement prohibited Crossroads from "discriminat [ing] upon the basis of race, color, creed, or national origin in the sale, lease, or rental or in the use or occupancy of the Property or any improvements erected or to be erected thereon, or any part thereof." These covenants were made binding on any successors in interest and the Agency and the United States were deemed beneficiaries, with the right to institute appropriate legal enforcement actions "for the purposes of protecting the interests of the community and other parties, public or private, in whose favor or for whose benefit such agreements and covenants have been provided."
On February 11, 1971, plaintiffs moved for summary judgment before Judge Tenney.3 This was followed on February 16 by a similar motion by Crossroads and the Bogdanoffs, and on April 1, the remaining defendants also moved for summary judgment. After considering the affidavits and depositions submitted by the parties, Judge Tenney granted the plaintiffs' motion for summary judgment against Crossroads and the Bogdanoffs4 and permanently enjoined the charged improper conduct.5 Because the affidavits indicated a genuine factual dispute over the responsibility of Peekskill, the Agency, and DiBart, summary judgment was denied against them. This appeal is taken by Crossroads and the Bogdanoffs from the order granting permanent injunctive relief. 28 U.S.C. § 1292(a) (1).
Our initial inquiry in this appeal must be directed at the crucial jurisdictional issue-was the conduct of Crossroads and the Bogdanoffs sufficiently infused with "state action" as to support jurisdiction of a claim under 42 U.S.C. § 1983 and the Fourteenth Amendment? Prior experience has demonstrated that "Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance." Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S. Ct. 856, 860, 6 L. Ed. 2d 45 (1961). Having conducted such an examination of the record, we conclude that the Crossroads project was pervaded with state action.
Under similar circumstances, the Supreme Court has concluded that a private enterprise was permeated with state action. In Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S. Ct. 856, 6 L. Ed. 2d 45 (1961), a private restaurant situated in a municipally owned parking garage was ordered to cease discriminating against Negroes. The Court concluded that public assumption of the cost of planning, constructing, and maintaining the garage structure infused the practices of the restaurant with state action.6
The narrow question we must now consider is whether refusal of the Bogdanoffs to even consider welfare recipients as applicants for apartment vacancies at the Crossroads denied these plaintiffs the equal protection of the laws. Although it is axiomatic that the Fourteenth Amendment does not prevent a state from imposing different treatment for different classes of persons as long as all persons similarly situated are treated alike, see, e. g., McGowan v. Maryland, 366 U.S. 420, 81 S. Ct. 1101, 6 L. Ed. 2d 393 (1961); Railway Express Agency v. New York, 336 U.S. 106, 69 S. Ct. 463, 93 L. Ed. 533 (1949), it is equally clear that the classifications created by the state must be rationally related to the objective sought to be achieved. See, e. g., McLaughlin v. Florida, 379 U.S. 184, 85 S. Ct. 283, 13 L. Ed. 2d 222 (1964).
The Bogdanoffs argue that they apply a uniform standard in approving or disapproving rental applications: ability to pay the rent. They urge that the justification for refusing to even consider welfare recipients is that the variance between the shelter allowances and the rent schedule at the Crossroads conclusively demonstrates that persons reliant upon public assistance would be unable to pay the rents charged for the Crossroads apartments. We agree that there is no requirement that welfare recipients, or any other individuals, may secure apartments in a development such as this without regard to their ability to pay. But it is clear that the state or its alter egos may not relegate welfare recipients to secondclass citizenship solely because they receive welfare subsistence. See Holmes v. New York City Housing Authority, 398 F.2d 262 (2d Cir. 1968). Colon v. Tompkins Square Neighbors, Inc., 294 F. Supp. 134 (S.D.N.Y. 1968). The seeming rational relationship between the sought-after objective-ability to pay-and the classification imposed-welfare status-fails when excess shelter allowances, which could have been available here, are considered.
These allowances, routinely granted in most instances as the record indicates, would provide sufficient funds to pay the rent at the Crossroads. Yet there is no dispute in the record before us that the very refusal of the Bogdanoffs to consider applications from welfare recipients set off the merry-goround and prevented the plaintiffs from securing excess shelter allowances. The only reasonable conclusion that can be drawn from the deposition testimony of Allen, Director of the Division of Family and Child Social Services, is that the Department of Social Services would not consider a Form 664 request for an excess shelter allowance unless a landlord was then prepared to rent a specific apartment to the applicant. Thus, initially, it is the Bogdanoffs's own conduct which prevents welfare recipients from demonstrating their ability to pay the rents charged at the Crossroads. For this reason, the record cannot demonstrate that any plaintiff applied for an excess shelter allowance or was eligible for one. The crucial fact is that such allowances were available and were usually granted. Accordingly, we cannot conclude that the classification "welfare recipients" employed by the Bogdanoffs has been drawn with the precision demanded by the Equal Protection Clause. See Eisenstadt v. Baird, 405 U.S. 438, 92 S. Ct. 1029, 31 L. Ed. 2d 349 (1971); Reed v. Reed, 404 U.S. 71, 92 S. Ct. 251, 30 L. Ed. 2d 225 (1971).7
Apartment SizeShelter AllowanceCrossroads Rent Studio .......................................... $135 $145 One Bedroom ..................................... $140 $155-$183 Two Bedroom ..................................... $170 $199-$203
An earlier motion for a preliminary injunction was denied by Judge Wyatt on December 3, 1970, 320 F. Supp. 141. He also denied a motion pursuant to F.R.Civ. P. 23(c) (1) for an order designating the suit a class action. Although argued on appeal by the parties, the correctness of this order is not properly before us. Because trial of the plaintiffs' claims against the municipal defendants remains, the order denying class action status is not a reviewable order, see F.R.Civ.P. 54(b), absent extraordinary circumstances not present here. Compare Eisen v. Carlisle & Jacquelin, 370 F.2d 119 (2d Cir. 1966), cert. denied, 386 U.S. 1035, 87 S. Ct. 1487, 18 L. Ed. 2d 598 (1967) (appellate review is not proper where denial of class action status does not sound "death knell" to the action)