Court Opinion

ID: 2965061
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:34:43.977012+00
Date Added: 2024-06-11T15:02:20.946128
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 97-1279

                                 ALFRED RASO, ET AL.,

                               Plaintiffs, Appellants,

                                          v.

                                 MARISA LAGO, ET AL.,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                       [Hon. Mark L. Wolf, U.S. District Judge]
                                           ___________________

                                 ____________________

                                        Before

                               Selya, Boudin and Stahl,

                                    Circuit Judges.
                                    ______________

                                 ____________________

            Chester Darling for appellants.
            _______________
            Saul A.  Schapiro with  whom Nina  F.  Lempert, Thomas  Bhisitkul,
            _________________            _________________  _________________
        Rosenberg  & Schapiro, Merita  Hopkins, Corporation Counsel,  Kevin S.
        _____________________  _______________                        ________
        McDermott  and Amanda P. O'Reilly, Assistant Corporation Counsel, City
        _________      __________________
        of Boston  Law Department, were  on briefs for appellees  Marisa Lago,
        Director   of  the   Boston   Redevelopment   Authority,  the   Boston
        Redevelopment Authority, Thomas  A. Menino, Mayor  of Boston, City  of
        Boston,  Victoria L. Williams,  Director of  the  Boston Fair  Housing
        Commission, Boston Fair Housing Commission, Sandra Henriquez, Director
        of the Boston Housing Authority and Boston Housing Authority.
            Rudolph  F.  Pierce  with  whom  Lynne  Alix  Morrison,  David  W.
            ___________________              _____________________   _________
        Fanikos, Goulston & Storrs, P.C.,  Richard M. Bluestein, Paul Holtzman
        _______  _______________________   ____________________  _____________
        and  Krokidas &  Bluestein were  on brief  for Robert  H. Kuehn,  Jr.,
             _____________________
        President  of Keen  Development Corp.,  and as  Trustee of  the Lowell
        Square  Nominee Trust,  Keen Development  Corp.,  Reverend Michael  F.
        Groden, Director of  the Planning Office for Urban  Affairs, Inc., and
        as Trustee  of the  Lowell Square Nominee  Trust, Planning  Office for
        Urban  Affairs, Inc., Lowell  Square Associates Joint  Venture, Lowell
        Square  Cooperative Limited  Partnership,  Mark Maloney,  President of
        Maloney Properties, Inc., and Maloney Properties, Inc.

            Susan M. Poswistilo, Assistant United  States Attorney, with  whom
            ___________________
        Donald K. Stern,  United States Attorney,  was on brief  for Henry  G.
        _______________
        Cisneros, Secretary of the Department of Housing and Urban Development
        and Department of Housing and Urban Development.
             

                                 ____________________

                                   January 27, 1998
                                 ____________________

                 BOUDIN,  Circuit Judge.  The plaintiffs in this case are
                          _____________

            former residents of Boston's Old  West End who were forced to

            relocate when their  homes were taken  by eminent domain  for

            urban  renewal.  They  claim that Massachusetts  law entitles

            them  to first preference for tenancy  of all new residential

            units built on the land, and that they are  being denied this

            preference in a new development called West End Place because

            most  former  West  Enders are  white.    The  district judge

            dismissed the complaint, leading to this appeal.

                 The background facts  are undisputed.  In May  1956, the

            Boston  Housing  Authority,  the  forerunner  to  the current

            Boston  Redevelopment Authority ("the BRA"),1 prepared a plan

            for  urban  renewal of  Boston's  Old  West End,  a  downtown

            neighborhood lying just  north of Beacon Hill.   The plan was

            approved  as required under  Massachusetts law, and  in 1958,

            the BRA ordered  a taking by eminent domain of  a large area,

            displacing  over   three  thousand   households  of   diverse

            heritages, but including few African Americans.

                 The  BRA executed  a  lease  agreement  with  a  private

            developer,  Charles River Park, Inc. ("Charles River").  Over

            the next ten years, Charles  River razed buildings in the Old

            West  End   and  built  offices,  condominiums,   and  luxury

                                
            ____________________

            1The  BRA is  an entity  established  by the  Commonwealth of
            Massachusetts  to  undertake  urban renewal  projects  and to
            relieve  housing  shortages.   See  Collins  v.  Selectmen of
                                           ___  _______      ____________
            Brookline, 325 Mass. 562, 564-66 (1950).
            _________

                                         -3-
                                         -3-

            residential   units.     The   new   buildings  were   either

            nonresidential or  so expensive that  very few of  the former

            West Enders could afford to occupy them.

                 In 1970, the BRA terminated Charles River as the project

            developer   and,  in   1986,  solicited  proposals   for  the

            development  of Lowell Square, located at the intersection of

            Lomasney Way and  Staniford Street, the only  remaining large

            undeveloped  section of  the Old  West End.   A  proposal was

            submitted   by   the   Lowell   Square  Cooperative   Limited

            Partnership (the  "developer")  to build  a  new  development

            called West End Place at Lowell Square.2  

                 The   BRA   eventually   awarded   the   developer   the

            redevelopment  contract.   One restriction  in  the agreement

            between  the BRA  and  the developer  mirrors a  provision of

            Massachusetts law requiring the BRA to obligate the developer

            as follows:

                 (c)  to give preference in the selection of tenants
                 for dwelling  units built  in the  project area  to
                 families displaced  therefrom because  of clearance
                 and renewal  activity who  desire to  live in  such
                 dwelling units and who will be able to pay rents or
                 prices  equal  to  rents  or prices  charged  other
                 families for  similar or comparable  dwelling units
                 built as a part of the same redevelopment; and 

                 (d) to  comply with  such other  conditions as  are
                 deemed  necessary to carry out the purposes of this
                 chapter, or requirements of  federal legislation or

                                
            ____________________

            2The  partnership later  underwent  a  name  change  and,  in
            addition,  the  complaint  names other  private  entities and
            individuals associated  with it.   For  convenience, all  are
            referred to as "the developer."

                                         -4-
                                         -4-

                 regulations   under   which    loans,   grants   or
                 contributions have been  made or agreed to  be made
                 to meet a part of the cost of the project.

            Mass. Gen. Laws ch. 121B,   49 (1986).

                 The  BRA also required  that the developer  work closely

            with former West Enders in  developing the property.  To that

            end,  a number of former West  Enders formed the Old West End

            Housing Corporation.  This nonprofit entity and the developer

            signed a  participation agreement, which stated,  inter alia,
                                                              __________

            that former West  Enders would have  first preference in  the

            purchase  or rental of  residential units in  West End Place,

            subject to applicable local, state, and federal laws.

                 The  developer sought out numerous sources of financing,

            including government funding from  local, state, and  federal

            agencies.  In  particular, the federal Department  of Housing

            and Urban Development  ("HUD") funded a grant of $2.5 million

            for  construction, and it  also committed $7  million in rent

            subsidies for the low-income units in West End Place.  See 42
                                                                   ___

            U.S.C.   1437f (1994).  Like most federal housing assistance,

            these funds were  contingent on compliance with  federal fair

            housing requirements.  See 24 C.F.R.    1.5, 5.105 (1997).
                                   ___

                 One  such requirement  is that  developer recipients  of

            federal housing funds  must carry out an  affirmative program

            to attract  minority, as  well as  majority, applicants;  the

            pertinent  regulation   contemplates  mailings   to  minority

            organizations,  assurances  of  nondiscrimination,  and  like

                                         -5-
                                         -5-

            measures.    Each applicant  is  required  to  set forth  its

            "affirmative fair housing  marketing plan" on a  HUD form and

            secure its approval by HUD.  See 24 C.F.R.    200.620 (1997).
                                         ___

                 In addition,  HUD is  subject to  a 1991  consent decree

            based  on a  finding that  HUD had  failed to  meet statutory

            obligations  to ensure that the minority population of Boston

            had equal access to public housing.  NAACP, Boston Chapter v.
                                                 _____________________

            Kemp, No.  78-850-S (D. Mass. Mar. 8, 1991) (consent decree).
            ____

            The   consent  decree  provides  that  all  Boston  area  HUD

            affirmative fair housing marketing plans "shall have as their

            goal  and measure  of  success the  achievement  of a  racial

            composition, in HUD-assisted housing located in neighborhoods

            which  are  predominantly  white, which  reflects  the racial

            composition of the City [of Boston] as a whole."  Id. at 2.3
                                                              ___

                 In  preparing  its  affirmative  fair housing  marketing

            plan,  the  developer  attempted  to reconcile  the  explicit

            statutory  obligation of a  first preference for  former West

            Enders with HUD's consent-decree goal of a tenancy reflecting

            the makeup of the City of Boston.  Minority races made  up 41

            percent  of  Boston's  population,  but  according  to  HUD's

                                
            ____________________

            3The consent decree ended lengthy litigation,  which included
            an  appeal  to  this  court,  over  HUD's  duties  to  foster
            integrated housing.  See NAACP, Boston Chapter v. Pierce, 624
                                 ___ _____________________    ______
            F. Supp. 1083 (D. Mass. 1985), vacated and remanded, NAACP v.
                                           ____________________  _____
            Secretary  of Hous.  & Urban  Dev.,  817 F.2d  149 (1st  Cir.
            __________________________________
            1987), on remand, NAACP, Boston Chapter v. Kemp, 721 F. Supp.
                   _________  _____________________    ____
            361 (D. Mass. 1989).  The decree provided that its provisions
            did  not "constitute"  and  should not  be  "construed as"  a
            quota.

                                         -6-
                                         -6-

            estimate, only  about 2  percent of the  former West  Enders.

            HUD  indicated that it  viewed an unqualified  preference for

            former  West Enders  as  contrary  to  federal  fair  housing

            requirements and the consent decree.  

                 The developer, the government agencies, and the Old West

            End Housing  Corporation submitted  the matter to  mediation.

            The   mediator,  a   former   United   States  Attorney   for

            Massachusetts,  proposed that  former West  Enders receive  a

            preference as  to 55 percent of the  units in West End Place,

            and all other  applicants have equal access to  the remaining

            45 percent.   The developer and the agencies  agreed; the Old

            West  End Housing  Corporation did  not.   Nevertheless,  the

            mediator's   solution  was   included   in  the   developer's

            affirmative fair  housing marketing plan, which  HUD approved

            in 1996.

                 The plan operates as follows.   West End Place  contains

            183  residential  units  that  fall  into   three  rent-based

            categories: 58 "low-income" units (subsidized by HUD  funds),

            48  "moderate-income units,"  and 77  units  to be  rented at

            market  rates.   Under the  plan,  the developer  is to  give

            former West Enders  first preference as to 101  of 183 units,

            that  is,  55 percent  of  the total.   These  101  units are

            unevenly distributed over  the three rent categories:  former

            West Enders have  a preference as to 19  low-income units (33

                                         -7-
                                         -7-

            percent),  24  moderate-income  units (50  percent),  and  58

            market-rate units (75 percent).

                 The tenant selection works by lottery.  Each preliminary

            application  is assigned a  random number.   The applications

            are   then  separated  into   two  pools:  pool   A  contains

            applications from  displaced former  West Enders  and pool  B

            contains  all other  applicants.   Then,  for the  low-income

            units,  the top-ranked  applicant from  pool  A is  selected,

            followed by the two  top-ranked applicants from pool  B; this

            yields a  total of 33  percent pool A applicants  (33 percent

            former West Enders) in the  low-income units.  The process is

            then repeated until all 58 units are tentatively allocated.

                 The  same lottery  approach is  used for  the other  two

            categories  of apartments.   For  moderate-income units,  the

            draw ratio is one-to-one (50 percent former West Enders); for

            the market-rate units,  three-to-one (75 percent former  West

            Enders).  Applicants who  have been selected in this  process

            are then invited to complete a full application and undergo a

            more   thorough   screening   process,  which   can   include

            verifications of personal references and credit history.  The

            same process can supply additional applicants if needed.

                 From  August 26  to September  26, 1996,  a real  estate

            manager hired by the developer coordinated community outreach

            efforts  to stimulate preliminary  applications.  The manager

            also contacted former West Enders as well as the Old West End

                                         -8-
                                         -8-

            Housing Corporation.   The manager eventually  received 1,858

            timely preliminary applications, 308 of  which identified the

            applicants as  former West  Enders.  Of  the 308  former West

            Ender applicants, 12  identified themselves as black,  one as

            Latino, and 19 did not identify their race.  

                 On September 26,  1996, the individual  plaintiffs--four

            former West Enders--filed  a complaint in the  district court

            challenging  the tenant  selection process  and  the plan  on

            numerous  grounds;  they purported  to represent  former West

            Enders as a  class.  The Old West End Housing Corporation was

            also named  as a plaintiff.   The numerous  defendants divide

            into four categories:  the BRA and its director;  HUD and its

            Secretary; the City  of Boston and various  of its officials;

            and,  finally,  the  developer   and  other  private  parties

            associated with the development of West End Place. 

                 On October 21,  1996, the plaintiffs filed  an emergency

            motion  for a  preliminary injunction  to  halt the  lottery,

            which was later withdrawn  when the defendants agreed  to let

            the  former West Enders' representatives monitor the lottery.

            In the lottery, which took place on October 29, 1996,  two of

            the  named plaintiffs received  rankings in the  lottery that

            make it  unlikely that  they will receive  units in  West End

            Place.

                 The developer  and  various other  defendants  moved  to

            dismiss the  complaint,  Fed. R.  Civ. P.  12(b)(6), and  the

                                         -9-
                                         -9-

            district court heard  argument on the motion on  November 20,

            1996.   On  January 6,  1997,  the district  court issued  an

            opinion dismissing  many of the claims with  prejudice.  Raso
                                                                     ____

            v. Lago, 958 F. Supp. 686 (D. Mass. 1997).  After  the former
               ____

            West  Enders  declined  to amend  their  complaint  to allege

            discriminatory  implementation  of the  plan--an  opportunity

            offered by  the district court--the district  court dismissed

            all  claims with  prejudice  and  entered  judgment  for  the

            defendants on February 11, 1997.

                 The former West Enders appeal from the dismissal of only

            two of the  numerous claims they made in  the district court:

            first, a claim under 42 U.S.C.   1983 that the plan  violates

            equal protection  principles because it comprises a forbidden

            racial  classification, and second,  a claim that  section 49

            creates  a trust  that subjects  the BRA  and developer  to a

            trustee's  fiduciary duties  in  favor  of  the  former  West

            Enders.    There are  also  a  few  references to  the  Tenth

            Amendment  and to federal  statutes but these  references are

            not seriously developed in plaintiffs' briefs.

                 We begin with section  1983, which pertinently  provides

            that  no  person  may  deprive  any  person  of  his  or  her

            constitutional rights under color of  state law.  42 U.S.C.  

            1983.    The  City of  Boston  and the  BRA  are  both "state

            actors," see Monell  v. Department of  Soc. Servs., 436  U.S.
                     ___ ______     __________________________

            658,  690  (1978), and  the  BRA  played  a central  role  in

                                         -10-
                                         -10-

            developing and  fostering the plan challenged  by plaintiffs.

            HUD is a federal  entity not subject to section 1983, but its

            officials  are  directly  constrained   by  equal  protection

            principles.4

                 In their complaint,  the former West Enders  allege that

            race was  a motive  for curtailing  the statutory  preference

            otherwise  available to  them.   Specifically, the  complaint

            cites the  defendants' reliance  upon the  consent decree  as

            comprising a racial  purpose and goal and asserts  that, as a

            result,  the former West Enders were deprived of a benefit--a

            statutory preference for all of the apartments--based upon "a

            racial classification."   In their appeal  brief, plaintiffs'

            shorthand  version  is  that  the  preference  was  curtailed

            "because" the former West Enders were predominantly white.

                 Factual assertions in a  complaint are normally accepted

            as  true for  purposes of  a  motion to  dismiss, see,  e.g.,
                                                              __________

            Berner  v. Delahanty,  129 F.3d  20, 25  (1st Cir.  1997); in
            ______     _________

            addition,  the defendants do not dispute that racial concerns

            and the consent decree prompted their effort to cut back upon

            the  statutory preference.    The reason  is  apparent:   the

                                
            ____________________

            4The Fifth Amendment's  Due Process Clause embodies  the core
            of the equal protection doctrine,  see Bolling v. Sharpe, 347
                                               ___ _______    ______
            U.S. 497, 499-500  (1954), and the Secretary of  HUD, a named
            defendant in  this case, is  subject to  suit for  injunctive
            relief for violations of the Constitution.  See, e.g., Larson
                                                        _________  ______
            v. Domestic &  Foreign Commerce Corp.,  337 U.S. 682,  689-91
               __________________________________
            (1949); E. Chemerinsky, Federal Jurisdiction   9.1.1, at 451-
                                    ____________________
            52 (1989).

                                         -11-
                                         -11-

            former West  Enders are  almost entirely  white, and  without

            some  limitation  on  the preference  rights  of  former West

            Enders, HUD  would  have been  funding subsidized  apartments

            from which minorities were effectively excluded.

                 HUD apparently thought  that this outcome  would violate

            the  consent decree and  its statutory obligation  to promote

            fair housing.   See 42 U.S.C.    3601-3619  (1994); 24 C.F.R.
                            ___

               200.600-200.640 (1997).   HUD may have  misunderstood both

            the consent decree  and the federal  statute, but whether  it

            did  or not, its  purpose to increase  minority opportunities
                              _______

            for apartments in West End  Place by curtailing the statutory

            preference  is evident.   To  this end,  it appears  that HUD

            simply declined to authorize funding unless and until some of

            the apartments were  made available to applicants  other than

            former West Enders.

                 This undenied racial motive distinguishes  the case from

            those  others  involving  facially  neutral  actions--like  a

            zoning law  or employee qualification  test--where the  state

            actor denies  any  racial  purpose  or  concern.5    But  the

            plaintiffs  are mistaken  in treating  "racial  motive" as  a

            synonym   for    a   constitutional    violation.       Every

                                
            ____________________

            5See,  e.g., Village  of  Arlington  Heights v.  Metropolitan
             __________  _______________________________     ____________
            Hous. Dev.  Corp., 429 U.S.  252, 270-71 (1977)  (upholding a
            _________________
            refusal  to rezone property  to allow construction  of multi-
            dwelling  buildings); Washington v. Davis, 426 U.S. 229, 247-
                                  __________    _____
            48 (1976) (upholding  a police department literacy  exam that
            excluded mostly black applicants).

                                         -12-
                                         -12-

            antidiscrimination  statute aimed  at racial  discrimination,

            and every  enforcement measure  taken under  such a  statute,

            reflect  a  concern with  race.    That  does not  make  such

            enactments  or actions  unlawful  or automatically  "suspect"

            under the Equal Protection Clause.

                 It is  quite true  that government  action taken out  of

            hostility to  a racial  group can be  condemned out  of hand,

            e.g., Yick  Wo v. Hopkins,  118 U.S. 356, 373-74  (1886), but
            ____  ________    _______

            there is no  allegation whatever  in the  complaint that  the

            defendants were hostile to whites.  Nor would any such motive

            be remotely  plausible.   Benign intentions  do not  immunize

            government action, but they substantially narrow the inquiry.

            The primary test is that any government action--regardless of

            benign intent--is suspect  if it has been taken  on the basis

            of   a   "racial   classification";  in   such   cases,   the

            classification  must  be  justified  by  a  compelling  state

            interest and  narrow  tailoring.   See Adarand  Constructors,
                                               ___ ______________________

            Inc. v. Pena, 515 U.S. 200, 235 (1995).    
            ____    ____

                 Despite  the use  of the "racial  classification" label,

            the complaint  alleges no facts  that would bring  that label
                                      _____

            into  play.   See Shaw  v. Digital  Equipment Corp.,  82 F.3d
                          ___ ____     ________________________

            1194, 1216 (1st  Cir. 1996).  The  term normally refers to  a

            governmental standard,  preferentially favorable to  one race

            or another, for the distribution of benefits.  E.g., Adarand,
                                                           ____  _______

            515 U.S. at 226-27; City of Richmond v.  J.A. Croson Co., 488
                                ________________     _______________

                                         -13-
                                         -13-

            U.S. 469, 493 (1989) (plurality opinion).  Yet under the plan

            adopted in this case, the apartments freed from the statutory

            preference are made available to all applicants regardless of
                                             ___

            race.

                 West  End Place  was  built with  federal  help and  its

            apartments   made   especially  desirable   through   federal

            subsidies.  It might not seem remarkable  that the government

            should insist, as a condition of this investment, that a fair

            number  of the  apartments  should  be  effectively  open  to

            application by tenants of all races.   Nor have we been  able

            to find  any case where  the government has been  required to

            show  a compelling interest, or narrow tailoring of remedies,

            for a  condition framed  so as to  secure equal  treatment of
                                                      _____

            applicants regardless of race.  

                 Language in a few Supreme Court decisions could be taken

            to  mean that  any  action  in which  race  plays  a role  is
                           ___

            constitutionally suspect.  However, the governmental  actions

            in  those   cases  were  fundamentally   different  and  more

            provocative.  In Adarand, the statute gave special incentives
                             _______

            to government  contractors to hire  minority subcontractors.6

            The  redistricting  cases  concern   state  voting  districts

                                
            ____________________

            6See Adarand, 515 U.S.  at 205-06; see also Croson,  488 U.S.
             ___ _______                       ________ ______
            at 493-94; Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 279-
                       ______    ____________________
            80  (1986)  (plurality  opinion);  R.  Rotunda  &  J.  Nowak,
            Constitutional Law   18.10(a)(1) (2d ed. 1992 & Supp. 1997).
            __________________

                                         -14-
                                         -14-

            designed to  concentrate minority  voters and  effectively to

            reserve seats for minority candidates.7  

                 Taken by itself, HUD's action in this case is almost the

            opposite of the  racial preferences that the  Court viewed as

            questionable in Adarand  and the redistricting cases.   Here,
                            _______

            the government's condition  on federal funds was that some of

            the   apartments--which    otherwise   would    have   almost

            automatically been  occupied by whites--be made  available to

            all applicants on a race-blind basis.  We cannot view this as

            a "racial classification[]" reserving benefits for  a favored

            race, Adarand, 515 U.S. at 235, or as "an effort to segregate
                  _______

            the races," Shaw, 509 U.S. at 642-43.
                        ____

                 Several  other equal  protection arguments  made  by the

            former West Enders need no lengthy discussion, either because

            they have  been essentially  abandoned on  appeal or  because

            they  are clearly unpersuasive.  The former category includes

            the former West Enders'  attack on HUD requirements that  the

            apartments be publicized in minority communities;8 the latter

            includes  the attempt to charge HUD with treating the consent

                                
            ____________________

            7See Bush  v. Vera, 116  S. Ct. 1941, 1955  (1996) (plurality
             ___ ____     ____
            opinion); Miller  v. Johnson,  515 U.S.  900, 906-09  (1995);
                      ______     _______
            Shaw v. Reno, 509 U.S. 630, 635-36 (1993). 
            ____    ____

            8HUD's  regulations  require  affirmative  outreach  in  both
            majority   and  minority   communities,  see   24  C.F.R.    
                       ___                           ___
            200.620(a); and in any case outreach efforts are not the real
            source  of the plaintiffs' problem--rather, it is the partial
            loss of their preference.   The defendants are no less guilty
            of muddling the issue in their pretense that outreach efforts
            are all that are involved in this case.

                                         -15-
                                         -15-

            decree's numerical  "goal" as  if it were  a quota--a  notion

            belied  by the substantial preference retained for the former

            West Enders.

                 The  story, however, is not quite over.  It is one thing

            for  HUD to  insist  that the  apartments it  subsidizes must

            effectively be open  to all races; it would  be quite another

            if HUD  planned  to impose  this requirement  only where  the

            beneficiaries  of the statutory preference were white.  That,

            we  think,  would be  government  action based  on  a "racial

            classification" and  would need  to be  narrowly tailored  to

            serve a compelling government interest.

                 The difficulty  is that we  are dealing here with  an ad
                                                                       __

            hoc  administrative action.    Accepting  the  truth  of  the
            ___

            complaint's factual allegations, HUD's actions were  prompted

            not by any  general, racially skewed policy  toward statutory

            preferences but by the peculiar interplay of Boston's consent

            decree, the Massachusetts statute, and the  respective racial

            makeups of the Boston population and  the former West Enders.

            What HUD  would  do  in  some  other,  hypothetical  case  is

            unknown, but  it is  certainly not  precluded, either  by the

            consent decree  or anything else, from  challenging statutory

            preferences that exclude whites.   Cf. Otero v. New York City
                                               ___ _____    _____________

            Hous. Auth., 484 F.2d 1122, 1125 (2d Cir. 1973).
            ___________

                 The  plaintiffs have alleged  no facts that,  if proven,

            would reveal  any secret discriminatory  standard, pattern of

                                         -16-
                                         -16-

            past practice,  or motive  beyond the one  HUD has  admitted,

            namely HUD's concern that the preference in this instance, if

            unmodified,  would  restrict  the  apartments  to whites  and

            subject   HUD  to   sanctions   under  the   consent  decree.

            Plaintiffs  simply think  that  this  purpose  is  enough  to

            condemn HUD'saction.  Forthe reasons already given,we do not.

                 We turn now to plaintiffs' second and  distinct claim on

            appeal that Mass.  Gen. Laws ch. 121B,   49,  "has the effect

            of creating  a trust for  the benefit of people  displaced by

            urban renewal."   The district court ruled that  there was no

            demonstrated  legislative intent to  create a trust  and that

            the  trust argument  failed  for  a  further  more  technical

            reason.   See 958 F. Supp. at 700  (citing New Eng. Trust Co.
                      ___                              __________________

            v. Sanger, 337 Mass. 342, 348 (1958)).  On appeal, plaintiffs
               ______

            devote five pages of their brief to discussing the requisites

            for trust creation under Massachusetts law.

                 Whether or not Massachusetts law created a trust for the

            former West Enders appears to us to  be beside the point.  If

            we assume arguendo  that the former West Enders  are entitled
                      ________

            to,  and can  enforce, whatever  priority  is provided  under

            section  49, subject always  to superseding federal  law, the

            trust concept  is nothing  more than  a possible  alternative

            remedy for enforcing  any unpreempted rights that  section 49

            may provide.   The question to  be answered, before  remedies

            are even pertinent, is the extent of those rights.

                                         -17-
                                         -17-

                 By  its terms  section  49(c)  creates  a  priority  for

            displaced  former  residents,  and  subsection  (d)  arguably

            qualifies this priority  by also obligating the  developer to

            comply   with  "requirements   of   federal  legislation   or

            regulations  under which loans, grants, or contributions have

            been made or agreed to be made to meet a part of  the cost of

            the project."   Mass.  Gen.  Laws ch.  121B,    49(d).    The

            defendants'  position, adopted by the district court, is that

            such federal requirements--as a matter of Massachusetts law--

            qualify   the  statutory  priority.     Plaintiffs  have  not

            challenged this ruling on appeal.

                 The plaintiffs  might have  argued  that the  limitation

            adopted  here is  not  itself  a  "requirement"  of  "federal

            legislation  or  regulations"  but   is  merely  a  developer

            proposal that HUD  has chosen to bless.  Possibly, plaintiffs

            thought that this arguable distinction did not matter because

            a  federal administrative  measure, even  if  not statute  or

            regulation,  might  override  state   legislation  under  the

            Supremacy Clause--assuming always  that it was  an authorized

            measure.  This  is by no  means clear, but arguments  on this

            point have not been made and need not be pursued. 

                 In the district court, it appears that plaintiffs' trust

            argument may have been advanced  primarily as an adjunct to a

            different  constitutional claim, namely a claim that the plan

            in  question impaired a property interest without due process

                                         -18-
                                         -18-

            or  just compensation.   The alleged trust,  in this context,

            would be a way of expressing a claimed property interest.  It

            is not obvious why a trust interest would be more entitled to

            this status than section 49's simple expression of a priority

            in favor of former tenants.

                 In all events, whether called a trust or something else,

            any  property interest created  by section 49(c)  is arguably

            subject to section  49's own explicit reservation  in section

            49(d).  As already noted,  the plaintiffs on this appeal have

            not  challenged the district court ruling that subsection (d)

            qualifies subsection (c) and also embraces the disputed plan.

            Taking  these  district court  rulings  as unchallenged,  the

            trust  argument adds  nothing to  the  due process  argument,

            which  itself has not itself been  renewed in the plaintiffs'

            briefs in this court.

                 This  is a case  that stirs conflicting  sympathies, for

            those  ousted  from  their West  End  neighborhood  by "urban

            renewal" many years ago  no less than for  minorities wrongly

            denied fair  housing opportunities  in Boston.   But we  have

            properly  sought to  decide this  appeal  based upon  Supreme

            Court precedent, as best we can discern it, recognizing  that

            the  case  is a  difficult  and unusual  one on  the  edge of

            developing law.               Affirmed.
                                          ________

                                                    Dissent follows.
                                                    _______________

                                         -19-
                                         -19-

                      Stahl, Circuit Judge, dissenting in part.  There is
                      Stahl, Circuit Judge, dissenting in part.  
                             _____________

            for  me considerable appeal  in the majority's  resolution of

            plaintiffs'  equal  protection  claims.     The  governmental

            conduct these claims challenge involves a patently good faith

            and facially reasonable  effort to accommodate  the competing

            interests  of two historic  losers in Boston's  housing wars:

            the  racial  and  ethnic minorities  entitled  to  invoke the

            protections  of  the  consent decree  in  NAACP  v.  Kemp and
                                                      _____      ____

            federal fair housing  laws, and  the former  West Enders,  an

            ethnically  diverse, lower middle  class group which,  in the

            name of "urban renewal," was forced from its neighborhood and

            could not afford to return. 

                      Nonetheless,  I cannot  join  the  portion  of  the

            majority opinion that affirms the district court's pleadings-

            based  dismissal of  the equal  protection claims.    While I

            agree with the  majority that  reverse discrimination  claims

            like the  present one  are "on the  edge of  developing law,"

            ante at 19, I do  think it settled that, when  the government
            ____

            withdraws  benefits from a  class of citizens  because of the

            race  or ethnicity  of the  class, courts  are to  scrutinize

            strictly  the government's  conduct so as  to ensure  that it

            furthers a  compelling governmental interest and  is narrowly

            tailored to advance that interest.  See Adarand Constructors,
                                                ___ _____________________

            Inc. v. Pena, 515  U.S. 200, 226-227 (1995).  For the reasons
            ____    ____

            that follow,  I believe plaintiffs'  complaint fairly alleges

                                         -20-
                                         -20-

            such a withdrawal of benefits.  And I do not  see how we can,

            at  this  stage  of  the litigation,  conclude  that  such  a

            withdrawal of benefits passes strict scrutiny.      

                      The   complaint  alleges   that  the   governmental

            defendants  curtailed  plaintiffs'  statutory  preference  in

            order to  comply with  the consent decree  in NAACP  v. Kemp.
                                                          _____     ____

            See ante at 11.   Because the purpose of that  consent decree
            ___ ____

            is  "the achievement of a racial composition, in HUD-assisted

            housing  located  in  neighborhoods  which are  predominantly

            white, which reflects  the racial composition of the  City of

            Boston as a  whole," id. at 6,  a reasonable inference to  be
                                 ___

            drawn from plaintiffs' complaint, see Aybar v. Crispin-Reyes,
                                              ___ _____    _____________

            118 F.3d 10, 13 (1st Cir. 1997) (reasonable inferences are to

            be drawn  in favor of  the party opposing  a Fed. R.  Civ. P.

            12(b)(6)  motion), is  that  defendants  acted  as  they  did

            because the putative plaintiff class was predominantly white.

            The  fact that defendants  "do not dispute"  this accusation,

            ante  at 11,  only  underscores  our  obligation  to  subject
            ____

            defendants' conduct to strict scrutiny, see Adarand, 515 U.S.
                                                    ___ _______

            at 224  ("[A]ny person,  of whatever race,  has the  right to

            demand   that  any   governmental   actor   subject  to   the

            Constitution  justify  any racial  classification  subjecting

            that person to unequal treatment under the strictest judicial

            scrutiny.").

                                         -21-
                                         -21-

                      The  majority reaches  a contrary  conclusion--that

            strict  scrutiny does not apply--because it regards the facts

            plaintiffs  have pleaded in support of their equal protection

            claims  insufficient to  describe a  "racial classification."

            See  ante at  13-16 (holding  that this  case is  outside the
            ___  ____

            principle  of  Adarand).   In  reaching  its  conclusion, the
                           _______

            majority emphasizes  the effect of curtailing  the preference
                                     ______

            on  non-parties to  this litigation,  see ante at  13 ("[T]he
                                                  ___ ____

            apartments  freed  from  the  statutory preference  are  made

            available  to all applicants  regardless of race."),  and the
                          ___

            defendants' intent in enacting the curtailment, see id. at 14
                        ______                              ___ ___

            ("It might  not seem  remarkable that  the government  should

            insist .  . . that a fair number  of the apartments should be

            effectively open to  application by tenants of  all races.").

            The majority  also reads  the complaint  to allege only  that

            defendants  acted as they did because plaintiffs are racially

            identifiable; it does not  read the complaint to allege  that

            defendants  acted as they  did because plaintiffs  are white.

            Id. at 15.   
            ___

                      Taking  this last  point first,  I  simply disagree

            with the majority's reading of the complaint.  The  complaint

            does not  allege that  the preference  was curtailed  because

            plaintiffs  are  racially  monolithic;  it alleges  that  the

            preference was curtailed because of the consent decree.  And,

            as I have stated, because the consent decree operates only in

                                         -22-
                                         -22-

            favor of racial  and ethnic minorities, it could  not be read

            to require curtailment  of the preference if  the former West

            Enders  were  predominantly  black.   Thus,  for  purposes of

            evaluating  defendants' Rule  12(b)(6)  motion, I  believe we

            must  read into  the complaint  the  allegation the  majority

            believes  necessary to trigger  strict scrutiny, see  ante at
                                                             ___  ____

            16:  that defendants would not have acted as they did had the

            plaintiff class  been predominantly of color.  See Aybar, 118
                                                           ___ _____

            F.3d at 13;  see also Conley  v. Gibson, 355  U.S. 41,  47-48
                         ___ ____ ______     ______

            (1957) (Fed. R. Civ. P.  8(a)(2) does not require a complaint

            to  set  forth  specific  facts   in  support  of  a  general

            allegation of discrimination).

                      Even  if the  majority has  properly  construed the

            complaint, I believe plaintiffs'  equal protection claims are

            sufficient to withstand a Rule 12(b)(6) motion and to trigger

            strict scrutiny.   In  the redistricting  cases, the  Supreme

            Court   has   emphasized   that   government   action   which

            subordinates  race  neutral considerations  to  an overriding

            racial purpose is  constitutionally suspect:   "We recognized

            in  Shaw[v. Reno,  509  U.S. 630  (1993)]  that, outside  the
                ____    ____

            districting context, statutes are  subject to strict scrutiny

            under the Equal Protection Clause  not just when they contain

            express racial classifications,  but also  when, though  race

            neutral on their face, they are motivated by a racial purpose

            or  object."   Miller v.  Johnson, 515  U.S. 900,  913 (1995)
                           ______     _______

                                         -23-
                                         -23-

            (affirming   the   invalidation,   under   equal   protection

            principles,  of a  Georgia  congressional redistricting  plan

            designed to increase  the number of majority  black districts

            in  Georgia)  (citation omitted).    It  remains to  be  seen

            whether  the Court  will  press this  principle to  its outer

            limit  and  strictly  scrutinize  even  governmental  conduct

            which, though  predominantly motivated  by a  racial purpose,

            would not appear  to burden any person because of  his or her

            race--e.g., a public university's efforts at recruiting fully
                  ____

            qualified applicants of  color for its first year  law school

            class.    But it  seems  apparent  that defendants'  lack  of

            hostility towards whites in particular, cf. ante at 13,  does
                                                    ___ ____

            not  shield  their  conduct--which  has  burdened  plaintiffs

            because they are, as a group, racially identifiable--from the

            most searching  judicial inquiry.   See  Miller, 515 U.S.  at
                                                ___  ______

            913.                          This leads to a final point.  I

            think the majority runs afoul of Adarand in concentrating its
                                             _______

            focus so heavily on both defendants' intent and the effect of

            defendants' actions on non-parties to this case.  The Supreme

            Court has squarely rejected the argument that classifications

            motivated   by   "benign"   considerations   should  not   be

            scrutinized strictly.   See  Adarand, 515 U.S.  at 226.   And
                                    ___  _______

            though this  case does appear  unique in that  the government

            conduct at  issue is more  a withdrawal of a  special benefit

            from whites than  a giving of special benefits  to members of

                                         -24-
                                         -24-

            minority groups,9 the  clear import of Adarand is  that it is
                                                   _______

            the  plaintiff's "personal right  to equal protection  of the
                              ________

            laws," 515 U.S. at 227,  and not some non-party's interest in

            competing for that which would be the plaintiff's but for his

            or her race, that is constitutionally safeguarded.   Thus, in

            evaluating the constitutionality  of defendants' conduct,  we

            must not  look to its  effect and motivation with  respect to

            others;  we  must  look at  its  effect  and  motivation with

            respect  to plaintiffs.  And here, quite clearly, defendants'

            conduct has  had  the effect  of  depriving plaintiffs  of  a

            benefit  and was  prompted by  the fact  that plaintiffs  are

            mostly white.   

                      Because  defendants'   conduct  should   have  been

            strictly  scrutinized, their  motion  to dismiss  plaintiffs'

            equal  protection  claim  should have  been  denied  and they

            should  have been  required to  produce  evidence that  their

            conduct  was  narrowly  tailored  to  advance   a  compelling

            governmental   interest.    See  Adarand,  515  U.S.  at  227
                                        ___  _______

            (reciting the components of the strict scrutiny inquiry); see
                                                                      ___

            also Aiken  v. City of Memphis, 37  F.3d 1155, 1163 (6th cir.
            ____ _____     _______________

            1994) ("When, as  here, a race-based affirmative  action plan

            is subjected to strict scrutiny, the party defending the plan

                                
            ____________________

            9It is important to note that there is no indication that the
            benefit  originally  given (i.e.,  the  full  preference) was
            given to  plaintiffs because  they were predominantly  white;
            rather, the  preference  was given  because  plaintiffs  were
            ousted from their homes.

                                         -25-
                                         -25-

            bears the  burden  of producing  evidence  that the  plan  is

            constitutional.").  Plaintiffs  should then have been  put to

            the burden of proving the unconstitutionality  of defendants'

            conduct.  See Aiken, 37  F.3d at 1162 ("The party challenging
                      ___ _____

            [a racially-preferential] plan retains the ultimate burden of

            proving its unconstitutionality.").   To the extent  that the

            majority  has   reached  a   different  conclusion,   I  most

            respectfully dissent. 

                                         -26-
                                         -26-