Court Opinion

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Opinions of the United
1996 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

12-17-1996

Farley v. Phila Housing Auth
Precedential or Non-Precedential:

Docket 96-1286

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Recommended Citation
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                  UNITED STATES COURT OF APPEALS
                      FOR THE THIRD CIRCUIT

                             No. 96-1286

                          LATICIA FARLEY

                                 v.

           PHILADELPHIA HOUSING AUTHORITY; FLOYD BAKER;
                    PAMELA DUNBAR; CLAUDE ROSS

                         Philadelphia Housing Authority,
                         Floyd Baker, Pamela Dunbar and
                         *Claude Ross,
                                   Appellants

                         *Amended Notice of Appeal filed
                         4/8/96

         On Appeal from the United States District Court
             for the Eastern District of Pennsylvania
                      (D.C. No. 95-cv-06616)

                     Argued October 28, 1996

            BEFORE: SCIRICA and COWEN, Circuit Judges
                  and FEIKENS, District Judge**

                    (Filed December 17, 1996)

Denise J. Baker, Esq. (Argued)
Philadelphia Housing Authority
2012 Chestnut Street
Philadelphia, PA 19103

     COUNSEL FOR APPELLANT

** Honorable John Feikens, United States District Judge for the
   Eastern District of Michigan, sitting by designation.
Michael Donahue, Esq. (Argued)
Community Legal Services
1424 Chestnut Street
Philadelphia, PA 19102

     COUNSEL FOR APPELLEES

                             OPINION

COWEN, Circuit Judge.

     Appellants, the Philadelphia Housing Authority and its housing
management personnel,
Floyd Baker, Pamela Dunbar, and Claude Ross (collectively "the PHA"),
appeal the March 8,
1996, order of the district court granting summary judgment to Laticia
Farley, a public housing
tenant, and denying their cross-motion for summary judgment. The district
court held that Farley
had a cognizable claim under 42 U.S.C. § 1983, and ordered the PHA to
fully comply with the
arbitration award that directed it to make repairs to Farley's apartment.
The PHA contends that
the district court did not have jurisdiction to enforce the arbitration
award, and erred in holding
that Farley had a cognizable federal cause of action under § 1983 to
enforce a public housing
grievance award pursuant to 42 U.S.C. §§ 1437d(k) and 1983. We hold that
the parties did not
intend to limit enforcement of grievance awards to state court. We also
hold that Farley can
bring a § 1983 action to enforce her federal right to implement the
grievance procedure provided
for in the Housing Act.
                                I.

                                A.
     The United States Housing Act, 42 U.S.C. § 1437 et seq., was designed
to provide
"decent, safe, and sanitary dwellings" within the financial reach of
families of low income. 42
U.S.C.
§ 1437 (1994). In order to encourage the construction and operation of
low-income housing, the
Act authorizes the Department of Housing and Urban Development (HUD) to
provide grants,
low-interest loans and tax exemptions to local public housing agencies
known as PHAs. Because
they receive federal subsidies, the PHAs are able to charge below-market
rent to eligible low-
income tenants. In exchange for receiving public funding, the local PHAs
are required to operate
public housing in compliance with the provisions of the Act.
     Section 1437d(k) is the provision at issue in this appeal. As
amended in 1983, this
section provides that each public housing agency must implement an
administrative grievance
procedure for the resolution of all tenant disputes concerning adverse PHA
action. It sets forth
the grievance/arbitration procedure that the local PHAs must follow, as
well as the rights to
which tenants are entitled under that procedure.
     The history of § 1437d(k) and its accompanying regulations dates back
to 1971, when
HUD issued a series of public housing circulars requiring the PHAs to
recognize certain
minimum tenant rights and provide an administrative grievance forum for
tenant complaints
concerning adverse PHA action. See U.S. Dept. Of Housing and Urban
Development Circulars
RHM 7465.8 and 7465.9. In 1975, HUD codified the requirements from the
circulars in the
Code of Federal Regulations. The circulars are currently codified in 24
C.F.R. § 966 (1994).
These regulations require the local PHAs to establish and implement
grievance procedures that
provide tenants with hearings if they dispute any PHA action or inaction
concerning lease
provisions or local regulations. See 24 C.F.R. §§ 966.50, 966.51(a),
966.53(a)(1994). The City
of Philadelphia's specific grievance procedure is outlined in the consent
decree entered in Brown
v. Philadelphia Housing Authority, No. 72-2083 (E.D. Pa. Mar. 15,
1974)("Brown consent
decree"); see also Stipulation and Order Supplementing and Clarifying the
Stipulation and Order
of June 14, 1974, Brown v. Philadelphia Housing Authority, 72-2083 (E.D.
Pa. Apr. 24, 1978).
     Farley seeks to enforce a specific regulation which states that
grievance awards are
binding on the local housing authorities and requires them to "take all
actions, or refrain from
any actions, necessary to carry out the decision [of the hearing
officer]." 24 C.F.R. § 966.57(b)
(1994). Her cause of action arises strictly under § 1437d(k). Regulation
§ 966.57(b) merely
interprets that section.

                                B.
     Farley is a tenant of a building in Philadelphia that is managed by
the Philadelphia
Housing Authority. She filed administrative grievances with PHA, seeking
a number of repairs
to her rental unit. She also sought an abatement of rent. Farley claimed
that the repairs sought
were necessary to prevent water from leaking into the basement of her
rental unit. These repairs
included repair or replacement of the heater, replacement of the windows,
repair of the holes in
the basement walls, repair of the leaking pipe in the basement, and
repairs as necessary to
remedy the low water pressure throughout her unit.
     An arbitrator held a grievance hearing and entered an award in
Farley's favor. The award
stated:
     1.   The Philadelphia Housing Authority shall inspect and
repair
all items of a non-contract nature within                    thirty (30)
days of the date of
this Award. Any                     matters which require contract work
shall be noted
and       written advice thereof shall be provided Ms. Farley and
her counsel
within thirty (30) days of this Award. All              contracted work
shall be completed within
ninety (90)               days of the date of this Award.

     2.   Ms. Farley is awarded a Ten (10%) percent abatement of
rent for the
period July 1, 1995 through such time as               the requested
repairs are completed. The
abatement                shall be credited to Ms. Farley's rent account.

App. at 159.
     The PHA did not make the required repairs; nor did it give Farley the
rent abatement.
Thereafter, Farley filed an action in the district court to enforce her
grievance award. The matter
was brought for resolution in the district court by cross-motions for
summary judgment. The
PHA argued that the district court lacked jurisdiction to enforce the
award or grant relief on what
was basically a garden-variety state landlord/tenant dispute. Holding
that it had jurisdiction to
hear the matter, the district court granted Farley's motion for summary
judgment and denied the
PHA's cross-motion for summary judgment. This appeal followed.

                                II.
     The jurisdiction of the district court to hear this matter and enter
judgment on the
arbitrator's award, is the issue on appeal. The district court
entertained subject matter
jurisdiction over the action pursuant to 28 U.S.C. §§ 1331, 1337,
1343(a)(2),(3),(4) and §§ 2201,
2202. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291. We
exercise plenary review
over questions of subject matter jurisdiction and the district court's
grant or denial of summary
judgment. See Clark v. Clabaugh, 20 F.3d 1290, 1292 (3d Cir. 1994); see
also Jordan v. Fox,
Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994); Brown v.
Francis, 75 F.3d
860, 864 (3d Cir. 1996).
                                III.
     The PHA asserts that the district court had no jurisdiction under §
1983 to enforce
Farley's grievance award. It argues that under the Brown consent
agreement, the PHA consented
only to the jurisdiction of the Pennsylvania state courts to enforce
arbitration awards. It further
contends it had no reasonable expectation that it would be called upon to
defend arbitration
enforcement proceedings in federal court.
     In support of its argument, the PHA states that the express terms of
Brown incorporate
the entire Pennsylvania Arbitration Act of 1927. It also points to a
provision in the 1978
amendment to Brown that reads, "[i]f either party should appeal an
arbitrator's award, such
appeal shall be governed by the provisions of the Pennsylvania Arbitration
Act of 1927."
Stipulation and Order Supplementing and Clarifying the Stipulation and
Order of June 14, 1974,
App. at 55, para. 3. The PHA argues that inclusion of this paragraph in
the Brown consent
agreement evidences the parties' intent to incorporate the entire
Pennsylvania Arbitration Act of
1927. The PHA further cites a provision of the Pennsylvania Arbitration
Act that states, "[a]n
appeal may be taken from an order confirming, modifying, correcting, or
vacating an award, or
from a judgment entered upon an award, in accordance with the existing law
in respect to appeals
to the Supreme and Superior Courts." 5 P.S. § 175(a). Also brought to
our attention is a
provision from the Pennsylvania Act stating that all grievance awards
"shall have the same force
and effect, in all respects as, and be subject to, all the provisions of
law relating to a judgment in
an action at law, and it may be enforced as such in accordance with
existing law." 5 P.S. § 174.
In addition, the PHA cites to a provision that states, "[t]he provisions
of this act shall apply to
any written contract to which the Commonwealth of Pennsylvania, or any
agency or subdivision
thereof, of any municipal corporation or political division of the
Commonwealth shall be a
party." 5 P.S. § 176. The PHA argues that, taken together, the above-
cited provisions indicate
that the parties consented solely to the jurisdiction of Pennsylvania
state courts to enforce
arbitration awards. We disagree.
     The Brown consent decree is a settlement agreement between the PHA
and its tenants.
We, therefore, construe it as a contract. See Pennwalt Corp. v. Plough,
Inc., 676 F.2d 77, 79 (3d
Cir. 1982). The scope of the Brown decree "must be discerned within its
four corners, and not
by reference to what might satisfy the purposes of one of the parties to
it." United States v.
Armour & Co., 402 U.S. 673, 682, 91 S. Ct. 1752, 1757 (1971). Reading the
above provisions
(paragraph 3 of the Brown amendments and §§ 174, 175, and 176 of the
Pennsylvania Act) and
looking to the entire documents, we find nothing in the Brown consent
agreement demonstrating
that the parties intended that enforcement actions be brought exclusively
in state court.
     The Brown decree is completely silent concerning the method for
enforcement of
arbitration awards. Paragraph 3 of the agreement does not incorporate the
entire Pennsylvania
Arbitration Act. It incorporates the Act only insofar as the Act concerns
appeals of the award of
an arbitrator. The issue before the district court was not the propriety
of the arbitrator's
resolution of the grievance, but only the enforcement of the award arising
from that grievance.
Looking to the four corners of the consent agreement, we conclude that the
parties to that
agreement intended that state court procedures would apply only to the
appeal of arbitrators'
awards, not the method by which awards were to be enforced.
     Finally, we cannot accept the position of the PHA that the provisions
of the Arbitration
Act are automatically incorporated into every contract involving a
Commonwealth agency. SeePennsylvania Turnpike Comm'n v. Sanders & Thomas,
Inc., 336 A.2d 609, 615 (Pa. 1975)
(incorporation of Act has occurred only where the contract contained an
arbitration clause); see
also Monte v. Southern Delaware County Auth., 321 F.2d 870 (3d Cir. 1963).
In Monte, this
Court stated that it would not "oust federal jurisdiction . . . merely
because the Authority, as an
arm of the state, is a party to this agreement." Id. at 873. We held
that under the specific Montecontract, arbitration awards could be
confirmed only in the Pennsylvania Court of Common
Pleas. We found that the parties in Monte intended to preclude federal
court jurisdiction because
the agreement in Monte contained a provision that incorporated the entire
Pennsylvania
Arbitration Act. Unlike the agreement in Monte, the Brown consent decree
does not contain any
such statement or any other indicia of intent to foreclose the enforcement
of arbitration awards in
federal court.
     The PHA cites to DePaul v. Kauffman, 272 A.2d 500, 506 (Pa. 1971) for
the proposition
that statutory and regulatory provisions of law in force at the time the
Brown consent decree was
entered became part of that agreement with the same effect as if expressly
incorporated in its
terms. Unlike the instant case, DePaul involved a constitutional
challenge to the Pennsylvania
Rent Withholding Act. The appellants in that case claimed the Act
unconstitutionally impaired
the obligation of contracts. The Pennsylvania Supreme Court rejected
their claim, stating, "[a]s
applied to leases entered into or renewed after the effective date of the
Act, there can be no
‘impairment', for the laws in force when a contract is entered into become
part of the obligation
of contract ‘with the same effect as if expressly incorporated in its
terms.'" Id. (quoting Beaver
County Bldg. & Loan Ass'n v. Winowich, 187 A. 481, 484 (Pa. 1936)). The
court went on to
say, "[w]ith regard to leases that predate the effective date of the Act,
it must be borne in mind
that ‘the interdiction of statutes impairing the obligation of contracts
does not prevent the state
from exercising such powers as . . . are necessary for the general good of
the public, though
contracts previously entered into between individuals may thereby be
affected.'" Id. (quoting
Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398, 437, 54 S. Ct. 231, 240
(1934)) (alteration
in original).
     The resolution in DePaul is not precedent for the instant case. We
do not conclude that
the Brown consent decree automatically incorporates the Pennsylvania
Arbitration Act. In order
to determine whether the Pennsylvania Act was incorporated into the Brown
consent decree we
must consider the intent of the parties. See Halderman v. Pennhurst State
School & Hosp., 901
F.2d 311, 322 (3d Cir.), cert. denied, 498 U.S. 850, 111 S. Ct. 140 (1990).
Nothing in Brownevidences the intent of the parties to incorporate the
entire Pennsylvania Act. Even if the parties
did intend to incorporate the entire Pennsylvania Act, (which we do not
believe they did), the
Pennsylvania Arbitration Act, like the Brown consent decree, does not
contain any provisions or
procedures regarding enforcement. The Act provides only that awards that
have been confirmed,
modified or corrected shall be judgments which "may be enforced as such in
accordance with
existing law." 5 P.S. § 174. Nothing in the Act requires PHA tenants to
enforce their awards in
state court.

                               IV.
     Section 1983 provides a remedial device to enforce rights under the
United States
Constitution and federal law. In Maine v. Thiboutot, 448 U.S. 1, 7-8, 100
S. Ct. 2502, 2506
(1980), the Supreme Court held that plaintiffs may invoke § 1983 to
redress violations of federal
statutory law by state actors. The Supreme Court has set forth two
exceptions to this general
rule. See Pennhurst State School and Hosp. v. Halderman, 451 U.S. 1, 101
S. Ct. 1531 (1981);
see also Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n,
453 U.S. 1, 101
S. Ct. 2615 (1981). The Pennhurst exception applies where the statute did
not create enforceable
rights within the meaning of § 1983. Pennhurst holds that Congress must
have intended for the
federal statute at issue to create enforceable rights in the private
party, not for it to merely state a
preference or policy declaration. Id. at 19, 101 S.Ct. at 1541. Under
the Sea Clammersexception, § 1983 cannot be invoked if Congress manifested
in the statute itself an intent to
foreclose its private enforcement. In Sea Clammers, the Court found that
in enacting the Federal
Water Pollution Control Act and the Marine Protection, Research, and
Sanctuaries Act of 1972
Congress devised comprehensive remedial schemes that provided for private
actions and left no
room for additional private remedies under § 1983. See also Smith v.
Robinson, 468 U.S. 992,
1012, 104 S. Ct. 3457, 3469 (1984)(indicating that a § 1983 action would be
inconsistent with
Congress' carefully tailored remedial scheme in the Education of the
Handicapped Act).
     Following this framework, we look to the Pennhurst and Sea Clammers
exceptions to
determine whether Farley has an enforceable federal right. In doing so,
we must analyze the
relevant statutory provisions "in light of the entire legislative
enactment." Suter v. Artist, M.,
503 U.S 347, 357, 112 S. Ct. 1360, 1367 (1992). We must determine whether
Congress intended
the statutory provision to benefit the plaintiff. See Golden State
Transit Corp. v. City of Los
Angeles, 493 U.S. 103, 106, 110 S. Ct. 444, 448 (1989). Further, the
statutory language must be
mandatory, not merely precatory in nature. Pennhurst, 451 U.S. at 18, 101
S.Ct. at 1540.
Finally, the right may not be "‘too vague and amorphous' to be ‘beyond the
competence of the
judiciary to enforce.'" Golden State, 493 U.S. at 106, 110 S.Ct. at 448
(quoting Wright v. City
of Roanoke Redevelopment and Housing Auth., 479 U.S. 418, 431-32, 107
S. Ct. 766, 774-75
(1987)).

                                A.
     Farley's § 1983 claim does not fall within the Pennhurst exception.
We conclude that by
enacting 42 U.S.C. § 1437d(k), Congress intended to give public housing
tenants a right to
enforceable grievance awards. First, Farley, as a public housing tenant,
is an intended
beneficiary of the procedures outlined in § 1437d(k) and its accompanying
HUD regulations. In
another case involving the very same issue, the United States Court of
Appeals for the District of
Columbia examined the legislative history of § 1437d(k), as well as the
enforcement history of
the circulars that § 1437d(k) codified. See Samuels v. District of
Columbia, 770 F.2d 184 (D.C.
Cir. 1985). The Samuels court found "Congress clearly intended to require
local PHAs to
provide an administrative grievance procedure for tenant complaints of
adverse PHA action, and
nothing in the structure or history of the [Housing] Act indicates that
Congress intended to
foreclose private enforcement of that obligation." Id. at 198. Samuels
also found support in the
fact that the provision "uniformly speaks of a tenant's entitlement to
particular procedural
protections in the face of adverse PHA action." Id. at 197.
     Second, the language of § 1437d(k) and 24 C.F.R. § 966.57(b) is
mandatory, specific, and
clear. The language is not too vague or amorphous to be enforced by
courts. The Samuels court
noted that before the codification of § 1437d(k), several courts of appeal
entertained tenant
challenges to PHA action and inaction under the original grievance
procedures as set forth in the
circulars that pre-dated § 1437d(k). See Samuels, 770 F.2d at 198. These
courts uniformly held
that the grievance procedures were mandatory and binding on the PHAs. Id.
Likewise, we
conclude that in enacting the grievance procedure under the Housing Act,
Congress intended to
impose mandatory obligations on PHAs. Section 1437d(k) and the
accompanying regulations
plainly set forth the grievance procedure that PHAs must follow. Section
1437d(k) is not a
general policy section or a "'nudge in the preferred direction[].'"
Pennhurst, 451 U.S. at 19, 101
S. Ct. at 1541 (quoting Rosado v. Wyman, 397 U.S. 397, 413, 90 S. Ct. 1207,
1218 (1970))
(alteration added). Rather, § 1437 confers enforceable rights within the
meaning of Pennhurstand § 1983.

                                B.
     Farley's claim also does not fall within the Sea Clammers exception.
The Supreme Court
has held that in enacting the U.S. Housing Act, Congress did not
specifically foreclose a § 1983
remedy by enactment of a comprehensive scheme of remedial mechanisms. See
Wright v. City
of Roanoke Redevelopment and Housing Auth., 479 U.S. 418, 107 S. Ct. 766
(1987). Although
Wright dealt with the Brooke Amendment, a provision under the Housing Act
that imposes a rent
ceiling on public housing, the Court also spoke generally about the
Housing Act.
     First, the Supreme Court cautioned that courts should not "‘lightly
conclude that
Congress intended to preclude reliance on § 1983 as a remedy' for the
deprivation of a federally
secured right." Id. at 423-24, 107 S.Ct. at 770 (quoting Smith v.
Robinson, 468 U.S. at 1012,
104 S.Ct. at 3468.) The Court then found support in the fact that "HUD
itself has never provided
a procedure by which tenants could complain to it about the alleged
failures of PHA's to abide
by . . . HUD regulations; nor has it taken unto itself the task of
reviewing PHA grievance
procedure decisions." Id. at 426, 107 S.Ct. at 772. The Court continued,
"HUD thus had no
thought that its own supervisory powers or the grievance system that it
had established
foreclosed resort to the courts by tenants." Id. The Court concluded
that nothing in the Brooke
Amendment or elsewhere in the Housing Act evidences that Congress intended
to supplant the §
1983 remedy. Id. at 429, 107 S.Ct. at 773. It also noted "the state-
court remedy is hardly a
reason to bar an action under § 1983, which was adopted to provide a
federal remedy for the
enforcement of federal rights." Id. Adhering to Wright, we must reject
the PHA's argument that
Farley should have litigated this garden-variety landlord/tenant case in
state court.
     The PHA argues that Wright is "not worthy of reliance," and we should
disregard it.
Appellant's Br. at 17. The PHA also implies that Wright has been put into
question by a line of
cases that has come after it, and is no longer good law. In making this
assertion, the PHA cites
specifically to Suter v. Artist M., 503 U.S. 347, 112 S. Ct. 1360 (1992).
The PHA contends, first,
that Suter changed the state of the law by announcing that Congressional
intent is the most
important factor in implying a private right of action. We do not find
this argument persuasive.
Prior to Suter, the Supreme Court certainly found importance in
ascertaining whether Congress
intended to create private rights. Indeed, in Wright, the Court based its
decision on its finding
that Congress did not intend to preclude a § 1983 cause of action for the
enforcement of tenants'
rights secured by the Housing Act. Wright, 479 U.S. at 425, 107 S.Ct. at
771.
     Second, the PHA argues that in the years following the Wright
decision, the Supreme
Court has disfavored implying private rights of action in spending
statutes. Appellant's Br. at 43
(citing Suter v. Artist M, 503 U.S. 347, 112 S. Ct. 1360 (1992)(specific
language in the Adoption
Assistance and Child Welfare Act, a spending statute, did not create a
federally enforceable right
under § 1983)). Although Congress's key purpose behind the Housing Act
was to provide
funding for local housing authorities, the Supreme Court and other courts
have found that
Congress also intended to establish tenant rights. See Wright v. City of
Roanoke Redevelopment
and Housing Auth., 479 U.S. 418, 107 S. Ct. 766 (1987)(plaintiffs could
bring a § 1983 action to
enforce Brooke Amendment of Housing Act which imposes a rent ceiling); see
also Samuels v.
District of Columbia, 770 F.2d 184 (D.C. Cir. 1985)(plaintiffs could bring
§ 1983 action to
enforce grievance procedure under 1437d(k)); Concerned Tenants Ass'n of
Father Panik Village
v. Pierce, 685 F. Supp. 316 (D. Conn. 1988)(plaintiffs could bring § 1983
action to enforce §
1437p, which mandates that local authorities obtain HUD approval of
demolition).
     Moreover, although Suter, like this case, involved a spending
statute, the specific
statutory language at issue in Suter is completely distinguishable from
the language in
§ 1437d(k). Suter involved a provision of the Adoption Assistance and
Child Welfare Act, 42
U.S.C. § 671(a)(15), which provides that states must make "reasonable
efforts" to prevent
removal of children from their homes and to facilitate reunification of
families where removal
has occurred. The Court held that this language does not confer an
enforceable right upon the
Act's beneficiaries. Instead, it found that the statutory language
"impose[d] only a rather
generalized duty on the State."
Suter, 503 U.S. at 363, 112 S.Ct. at 1370. By contrast, § 1457d(k) does
not merely impose a
general duty. Instead, it mandates the very grievance process that PHAs
must follow and details
the rights to which the tenants are entitled.
     The Supreme Court did not sub silentio overrule Wright in Suter. It
remains good law.
Wright held that by enacting the Housing Act, Congress intended to grant
enforceable rights to
tenants of public housing. Nothing in Suter or any other case alters this
conclusion.

                                V.
     The district court was correct that it had jurisdiction to enforce
Farley's public housing
arbitration award. Nowhere in the Brown consent decree did the parties
intend to limit
enforcement of awards to state court. The district court was also correct
that Farley, a public
housing tenant, could maintain a § 1983 action to enforce her federal
right to an enforceable
grievance procedure as provided for in the Housing Act. We will affirm
the May 8, 1996, order
of the district court granting Farley's motion for summary judgment and
denying the PHA's
cross-motion for summary judgment.