Court Opinion

ID: 9457923
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:38:26.846737+00
Date Added: 2024-06-11T17:35:34.785392
License: Public Domain

DUFFY, Senior Circuit Judge.
This is the third round before us of a bitterly contested controversy. Two suits- were commenced in 1966. Our first opinion, by a divided court, appears in Gautreaux v. Chicago Housing Authority, et al., 436 F.2d 306 (7 Cir., 1970). We there held it was not an abuse of discretion for the District Court to impose dead lines and to order the Chicago Housing Authority (CHA) to use its best efforts to increase the supply of dwelling units as rapidly as possible.
On the second appeal (Gautreaux v. Romney, 448 F.2d 731 (7 Cir., 1971)), we concluded that summary judgment *126should be granted to plaintiffs on both Counts I (Fifth Amendment) and II (42 U.S.C. § 2000d, § 601 of Civil Rights Act of 1964), and that HUD had violated the due process clause of the Fifth Amendment by its acquiescence in the pre-1969 site selection procedure of Chicago Housing Authority. However, we made the following statement: “[We] again point out that our holding should not be construed as granting a broad license for interference with the programs and actions of an already beleaguered federal agency [HUD] It may well be that the District Judge, in his wise discretion, will conclude that little equitable relief above the entry of a declaratory judgment and a simple ‘best efforts’ clause will be necessary to remedy the wrongs which have been found to have been committed.”
The District Court did not choose to follow our suggestions in this respect. On October 1, 1971, 332 F.Supp. 366, the court signed an order enjoining the defendant, George W. Romney, Secretary of the Department of Housing and Urban Development (HUD) from making available to the City of Chicago, any funds for the second period of the Model Cities Program unless the City complied with certain stated conditions. This order involved the withholding of approximately $26,000,000 in federal funds.
Funds for the purpose of constructing, maintaining and achieving low rent housing are provided by the United States Housing Act of 1937 (42 U.S.C. § 1401-et seq.). The Secretary of HUD is charged by law with the administration of such funds. CHA does not provide any housing, low rent or otherwise, with any funds distributed under the Model Cities Programs.
The Model Cities Programs are created under the Demonstration Cities and Metropolitan Development Act of 1966 (42 U.S.C. §§ 3301 et seq.). Under these Programs the Secretary of HUD is authorized to grant funds for the purpose of enabling cities to undertake various programs for the benefit of low and moderate income people.
Under this legislation, the City of Chicago is and has been carrying on a five-year Model Cities Program. The City has received or was scheduled to receive $38,000,000 a year to carry on various services, which included numerous educational and job-training programs, health care centers, day care centers and other related activities. Approximately 4000 people are employed to carry out the Model Cities Program of Chicago and its related activities. The chief beneficiaries are the poor people of Chicago, many of whom are black.
Among those greatly benefited by the Model Cities Programs are 4328 CHA tenant families at the Robert Taylor Homes (population 27,030), and the 1444 tenant families at the Washington Park Homes (population 8755), located in the City of Chicago. These developments are within the near South Side Model Cities target areas.
There are no District Court findings that the Chicago Model Cities Program has been improperly administered or that it is tainted with racial discrimination. Indeed, the plaintiffs have made no such claim. About 150,000 people are direct beneficiaries of one or more of the Model Cities Programs’ activities in the Chicago area.
HUD was prepared to release the remaining sum of $26,000,000 to this Model Cities Program. It would have done so except for this proceeding instituted by plaintiffs. It is candidly admitted that the purpose of the District Court’s order was intended to apply pressure on the City of Chicago to compel it to approve of CHA housing sites. The decision to release the $26,000,000 for Model Cities Programs was that of George Yavoulis, HUD Regional Director.
The Regional Director (Vavoulis) was greatly concerned at the devastating impact upon the city’s poor which would follow the cutting off of the Model Cities Programs and which, he felt, would far outweigh the hope of spurring the Chicago City Council into action approving low cost public housing sites in predominantly white areas.
*127Intervenor-appellants well state the question before us to be: “But here one party (HUD) had been ordered to stop financing a program, Model Cities, which is free from taint, in order to force a non-party (City of Chicago) to comply with an order in a case in which it was not a party, nor charged with anything, nor found to have done anything improper and of course, not ordered to do anything.”
In a Civil Rights case, the Court’s task is “to correct, by a balancing of the individual and collective interests, the condition that offends the Constitution.” Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1, 16, 91 S.Ct. 1267, 1276, 28 L.Ed.2d 554 (1971). But here there was no balancing of interests. The rights of the many thousands of beneficiaries of the Model Cities Program were entirely ignored.
The District Court here proceeded as though HUD, in some court proceeding, had been found guilty of some wrongdoing in administering the Model Cities Program in Chicago. This, of course, is not the case.
In a memo to the District Court, HUD stated with reference to the Housing program: “Although the city’s [Chicago] performance to date has not come up to expectations, nevertheless, the city has made some progress in achieving the housing goals set forth in the letter of intent.”
HUD also wrote to the District Court: “. . . and since Model Cities money will contribute to essential social services for inter-city residents, it would not be in the best interests of HUD or the citizens of Chicago, to withhold the Model City Funds at this time.”
We think it was improper for the District Court to threaten the termination of a program which was not tainted with discriminatory action in order to bring about a cure of a separate program which was found to have been so tainted.
Certainly, the District Court’s order lacked a balancing of the individual and collective interests involved. The Court ignored the interest of poor people, mostly black, intended by Congress to be the beneficiaries of the Model Cities Programs while seeking enforcement of a timetable for the erection of housing units in white areas which, although laudable, could not be achieved in time to prevent the catastrophe threatened by the District Court’s order terminating federal funds to a program not found to be discriminatory.
In our mandate of Gautreaux v. Romney, supra, (Gautreaux II) issued on September 10, 1971, and in the mandate of the earlier companion litigation decided by our Court, Gautreaux v. CHA, supra (Gautreaux I), we found violations of plaintiffs’ rights in federal and city programs for low-income public housing to be made available to low-income families in Chicago.
In spite of minimal Model Cities Program involvement with low-cost public housing for low-income families, the District Court, following our mandate in Gautreaux II, found it advisable to terminate the entire Model Cities Program in Chicago in order to bring pressure to bear upon the Chicago Housing Authority, the Chicago City Council and the Mayor of Chicago. While the Model Cities Program in Chicago does include activities affecting housing and relocation (six of fifty or more Model Cities Program activities) within its broad aim of social, economic and educational assistance to low-income families, these six activities entail expenditures of only $3,-000,000 of a total annual budget of $38,-000,000 for the Model Cities Program.
In the last of a series of letters between Mr. Vavoulis, the Regional Director of 'HUD, and the Mayor of Chicago, dated January 6, 1972, the entire annual funding of $20,000,000 for the Neighborhood Development Program (NDP) for 1971 was formally terminated by HUD. Mr. Vavoulis stated as his rationale for such termination: “It was our [HUD’s] sincere belief that the City and CHA proposals as outlined in the Letter of Intent [May 12, 1971 letter] would lead *128to a meaningful replacement and expansion of the housing supply for Chicago’s low income families . . . that result has not occurred. . . . ”
Plaintiffs argue on this appeal that if HUD was justified in refusing the NDP program, it hardly could have been an abuse of discretion for the District Court to direct HUD to take the same position with respect to the Model Cities Program, owing to the fact that both programs have essentially the same relocation requirements. What plaintiffs fail to realize in their argument is the fact that relocation and housing is the entire purpose of the NDP program while, as noted previously, relocation and housing-related activities compose only six of fifty or more activities under the Model Cities Program.
In Board of Public Instruction of Taylor County, Fla. v. Finch, 414 F.2d 1068 (5 Cir., 1969), a case discussed by all parties to this appeal, the Department of Health, Education and Welfare terminated all federally-financed activities because of segregation in elementary schools and high schools in the county. The Court of Appeals held that schools and programs are not condemned en masse by Section 602 of the Civil Rights Act of 1964 where racial discrimination and segregation are found in isolated activities, but only if such activities utilize federal money for unconstitutional ends. The Court of Appeals in Taylor County, supra, reasoned that wholesale cutoffs of federal funds from all related federally-funded programs was not required under the Civil Rights Act of 1964. Instead, a case-by-case application of principles of nondiscrimination to particular activities should be applied.
Plaintiffs assert that Section 602 applies to administrative, not to judicial termination of funds, and certainly is not inhibiting on the equitable remedial powers of federal courts. Yet, Section 602 and the mandate of the Taylor County, supra, decision, prohibit HUD and other federal agencies from doing precisely what the District Court has ordered — enjoining all federal funding from a program where the only possible violations found in Gautreaux I and II might possibly exist in six of fifty or more activities. Heretofore, no discrimination has been found in these six activities of the Model Cities Program,
The policy of limiting administrative power to terminate federal funds to activities which only are discriminatory or segregated, was not for the protection of the political entity whose funds were severed, but for the innocent beneficiaries of the programs and activities not tainted by discriminatory tactics. As indicated by the comments of Senator Pastore in debates concerning the adoption of Section 602 — . . We would not have to cut off assistance to 100 people because 1 person was being discriminatory in the administration of the money.’ ” (Quoted 414 F.2d at 1075, 76 n. 12), the aim of the Act was not to deprive needy recipients of funds for nondiscriminatory programs or activities.
It was and is the desire of the United States Government to provide breakfasts, day-care centers, improved and expanded educational facilities and adequate medical facilities for the needy through the Model Cities Programs. Other Program activities included nondiscriminatory public housing encompassed in six of the fifty activities of the Program. We believe Congress did not desire a policy of forsaking all the beneficial aspects of the Model Cities Program not tainted by discrimination for one aspect of the Program which could be, but has not yet been found to be discriminatory.
The judgment of HUD that Model Cities funds should be released was supported by the evidence in this case. In our view, the District Court’s judgment and the November 11, 1971 order enjoining all these funds, was an abuse of discretion.
Defendant-appellant Romney and the various Intervenor-appellants have appealed both the order of the District Court issued on October 1, 1971 and the *129injunction granted by the District Court on November 11, 1971 following the issuance of our mandate in Gautreaux II. Motions were presented by the various appellants to our Court to consolidate the two appeals: that the record of the first appeal stand as the record in the consolidated appeal; that the briefs for the prior appeal stand for the subsequent briefs; that the prior briefing schedule remain in effect and that the time for oral argument similarly remain in effect.
The only motion presented by plaintiffs-appellees was a motion to dismiss the prior appeal of the October 1,1971 order for reason of mootness. Plaintiffs argue the order lapsed by its terms upon our issuance of the Gautreaux II mandate, and the substantive issues of both appeals are identical.
We feel the motion to dismiss the appeal of the October 1, 1971 order made by plaintiffs-appellees on appeal is persuasive. The November 11, 1971 injunction incorporated the entirety of the requirements and guidelines of the October I, 1971 order following the issuance of the Gautreaux II mandate. Therefore, the appeals numbered 71-1732, 71-1733 and 17-1734 before our Court, appealing the October 1, 1971 order, should, be dismissed for reason of mootness. The issues raised by this appeal are before our Court in this appeal of the November 11, 1971 injunction, Appeal No. 71-1807, and were considered herein.
By reason of our finding that the November 11, 1971 injunction granted plaintiffs-appellees was an abuse of discretion by the District Judge, we reverse his judgment and remand this cause to the District Court for proceedings not inconsistent with this opinion.
Reversed and remanded.