The opinion of the court was delivered by: BECKER
EDWARD R. BECKER, District Judge.
The Economic Opportunity Act of 1964 (Act)
authorizes federal grants for the operation of Community Action Programs,
including Comprehensive Health Services programs.
This case involves one of these Community Action Programs. In 1967, a Philadelphia city ordinance created the Philadelphia Anti-Poverty Action Commission (PAAC) to administer and coordinate community action programs within the city.
PAAC is a "community action agency" (CAA) within the definition of the Act. The same year, funded by a grant from the federal Office of Economic Opportunity, OEO, PAAC, and Temple University of the Commonwealth System of Higher Education (Temple) established the Comprehensive Group Health Services Center at 2539 Germantown Avenue, Philadelphia, and the West Nicetown-Tioga Neighborhood Family Health Center at 3450 N. 17th Street, Philadelphia, to provide comprehensive health services to inhabitants of the Hartranft, West Nicetown, and Tioga sections of the city. PAAC is the recipient of the grant for the funding of the centers and distributes the funds to Temple, which, as the so-called "delegate agency," administers the program and provides the bulk of the necessary technical resources.
Noting that the causes of proverty include lack of education, poor health, absence of a marketable skill, and unstable family life, the Act sets in motion a comprehensive effort to attack the causes of poverty by coordinating the antipoverty efforts of federal, state, and local governmental agencies and private non-profit agencies, by using innovative techniques in the development and implementation of programs, and by requiring the active involvement of the people to be served. Central to the structure of the Act is the notion of "community action," the belief that local citizens understand their communities best and that they will provide leadership by developing and implementing local programs.
The concept of active involvement of the people to be served is one of the most important, as well as innovative, features of the Act. The purpose of the Congressional requirement of citizen participation is explained in the first section of Title II
of the Act:
[To] promote . . . (4) the development and implementation of all programs and projects designed to serve the poor or low-income areas with the maximum feasible participation of residents of the areas and members of the groups served, so as to best stimulate and take full advantage of capabilities for self-advancement and assure that those programs and projects are otherwise meaningful to and widely utilized by their intended beneficiaries . . . ."
42 U.S.C. § 2781(a)(4) (emphasis added). With respect to Comprehensive Health Services programs specifically, the Act provides that they shall include programs "designed . . . (ii) to assure that . . . services . . . are furnished in a manner most responsive to [the] needs [of low income residents of the target areas] and with their participation. . . ." 42 U.S.C. § 2809(a)(4)(A) (emphasis added).
As will be seen, the notion of maximum feasible community participation is the touchstone of this case, which raises questions of the role of a community participation component of a comprehensive health services program and of the manner in which such a component may legally be altered.
The Regulations place a gloss upon the maximum feasible community participation language of the statute by requiring " meaningful " participation in all programs (see note 3) funded with community action moneys. The Regulations require, inter alia, that: (1) all funding applications explicitly indicate a course of action which will lead to improvement in the involvement of poor people in the community action programs; (2) all community action programs provide guidance, training, and technical assistance to poor people so that their involvement may be effective; (3) the poor be provided employment in all phases of community action programs; (4) delegate agencies involve poor people in the planning, operation, and evaluation of delegated programs, by establishing a program advisory committee at least half of whose members are democratically selected representatives of the poor served by the program.
The program advisory committees, in addition to their program responsibilities, must have a strong voice in the development of personnel policies.
The Guidelines also deal directly with the effectuation of the community involvement concept. The Guidelines mandate that "neighborhood residents must share with the operating organization the responsibility for policy making" so as to maximize responsiveness to the community's needs. The specific means of giving a policymaking voice to neighborhood residents are detailed in the Guidelines:
The Neighborhood Health Council shall participate in such activities as the development and review of applications for OEO assistance, selection of the project director, the location and hours of the Center's services, the development of employment policies and selection of staff personnel, the establishment of program priorities, the establishment of eligibility criteria and fee schedules, the selection of neighborhood residents as trainees, the evaluation of suggestions and complaints from neighborhood residents, the development of methods for increasing neighborhood participation, the recruitment of volunteers, the strengthening of relationships with other community groups, and other matters relating to project implementation and improvement.
B. The Dispute in This Case
The plaintiffs, Comprehensive Group Health Services Board of Directors (CGHS)
and Health Oriented Consumers, Inc. (HOC), successor to the West Nicetown-Tioga Neighborhood Family Health Center Board of Directors (WNT) (collectively "plaintiff Boards"), are the community action program advisory boards that were established to provide the required community participation in the comprehensive health services programs involved in this case. CGHS was the advisory board for the Hartranft center at 2539 Germantown Avenue, and HOC was the advisory board for the West Nicetown-Tioga center at 3450 N. 17th Street.
After being displaced, plaintiff Boards brought this lawsuit for declaratory and injunctive relief. They ask that we permanently enjoin defendants from operating the centers without recognizing plaintiffs as the community participation components thereof and from maintaining a new board without plaintiffs' participation therein, and that we declare that defendants acted illegally in purporting to dissolve and replace plaintiff Boards. The complaint also alleges that the defendants seized plaintiffs' files and denied them access to the centers, and seeks appropriate relief. Plaintiffs also ask that we declare that defendants have violated the Act, the Regulations, and the Guidelines by unduly narrowing the scope of plaintiffs' participation in program planning to exclude them from the preparation of the budget, the decision to undertake a health maintenance program,
and the selection and removal of the project director. The complaint includes a general allegation that defendants have refused "to permit plaintiffs to participate in policy decisions concerning the centers." Samuel L. Evans (Evans), PAAC's Chairman, and Melvin L. Hardy (Hardy), PAAC's Executive Director, are named as defendants because they played major roles in the events giving rise to the lawsuit. This litigation does not involve issues of any details of the actual operation of the health centers, and the delivery of health care to the community is not affected by this case.
The dominant issue in the case is that of plaintiffs' displacement. The nub of their position on that issue is their assertion that an established community participation component may be changed only with the full participation of the existing community board and in a manner that comports with standards of fair play, good faith negotiation, and due process of law, with the board participating meaningfully and effectively throughout the entire decision-making process. They submit that such did not occur here. In plaintiffs' view, if the delegate agency or grantee agency have different views from the plaintiff Boards on a subject such as merger, they are obligated to communicate those differences to the boards and to negotiate the differences in good faith. Plaintiffs contend that instead of doing that, the delegate and grantee agencies simply ordered the plaintiff Boards to merge, and then, when the command was not quickly enough implemented, proceeded summarily to exclude the community boards from the decision-making process and from the program, in violation of the Act. In essence, as plaintiffs see it, in order to represent the community effectively, the community boards must be autonomous, not dependent for their existence on the delegate and grantee agencies.
In terms of the other issue in the case, the general role of advisory boards vis-a-vis the Centers, plaintiffs contend that they were denied effective participation in important facets of policymaking and were not permitted to act as a community check and balance as required by the Act.
Needless to say, Temple and PAAC disagree with plaintiffs' view of the facts. Their position is that they created a unified board only when the foot-dragging and recalcitrance of the plaintiff Boards, each seeking to preserve its status and private domain, became intolerable. The defendants also disagree with plaintiffs on the law. Temple contends that the program advisory boards are the mere creations of the grantee and delegate agencies, who therefore have plenary power to remove the boards subject only to the limitations of good faith and continued community participation.
PAAC goes further and contends that participation of the program advisory boards is unnecessary because the maximum feasible community participation requirement was satisfied by the very presence of PAAC in the picture.
And both Temple and PAAC view the Boards' roles in policy matters in general more narrowly than do the plaintiffs.
This is not the first case arising in this Circuit addressing the question of the validity of change in a community participation component of a federally funded program. Although in a different context (the Metropolitan Development Act of 1966, better known as the Model Cities Act)
and under different operative facts, the United States Court of Appeals for the Third Circuit has written on three occasions in this general area, thereby establishing some important benchmarks. The three opinions are all in the same case: North City Area-Wide Council, Inc. v. Romney, 428 F.2d 754 (3d Cir. 1970); 456 F.2d 811 (3d Cir.), cert. denied, 406 U.S. 963, 92 S. Ct. 2063, 32 L. Ed. 2d 351 (1972); 469 F.2d 1326 (3d Cir. 1973) (hereinafter " North City I, II, and III "). Regrettably there is no reported authority on the other points in the case and indeed there is precious little authority in any aspect of this nascent field of law.
Indeed, this is one of the few cases under the Act developed on a full record as opposed to a preliminary stage of the proceedings. With the benefit of the foregoing background, we turn to our findings of fact.
A. Identity of the Parties and Formation of the Programs
Defendant Temple is a Pennsylvania non-profit corporation and a state-related institution of the Commonwealth of Pennsylvania. Defendant City of Philadelphia (City) is a municipal corporation. Defendant PAAC is an agency of the City created by City ordinance to administer federal poverty programs in Philadelphia and to provide certain services in connection therewith. It is a Community Action Agency within the terms of title II of the Economic Opportunity Act of 1964, 42 U.S.C. § 2790(a). At all times relevant hereto, defendant Evans was the chairman of PAAC and defendant Hardy was its executive director.
In mid-1967, in furtherance of the Comprehensive Health Services Program (Program), a community action program authorized by OEO pursuant to title II of the Act, 42 U.S.C. § 2790(a), PAAC and Temple established both the Comprehensive Group Health Services Center (CGHS Center) at 2539 Germantown Avenue, Philadelphia, and the West Nicetown-Tioga Neighborhood Family Health Center (WNT Center) at 3450 N. 17th Street, Philadelphia. What was thus created was a single program, operating through two centers, and providing a full range of health services to the Hartranft and the West Nicetown-Tioga sections of North Philadelphia respectively. Available services included medical care, dental care, preventive health services, pharmaceutical services, health out-reach services in the community, and health-related social services.
On October 20, 1967, PAAC, by contract and in accordance with law, delegated to Temple the function of administering the Comprehensive Health Services Program. Temple continues to be PAAC's delegate agency for this community action program. PAAC serves as grantee for the funding for the program and distributes the funds to Temple. Funding, initially provided by OEO, was transferred to HEW on December 14, 1970, pursuant to an Executive Directive and a Memorandum of Understanding executed on November 2, 1970, between the Director of OEO and the Secretary of HEW. The last grant for the Comprehensive Group Health Services program prior to trial was $5,180,323. In 1967 PAAC and Temple established an advisory board for each center to assist in the planning, conduct, and evaluation of the Comprehensive Health Services Program and to provide community participation.
When it was established, the advisory board for the CGHS Center was an unincorporated association with offices at 2539 Germantown Avenue, Philadelphia, and was named Comprehensive Group Health Services Center Advisory Board. In bylaws adopted November 6, 1969, it changed its name to Comprehensive Group Health Services Board of Directors. Plaintiff CGHS was actually first formed as the Board for the Children and Youth Program at the St. Christopher's Hospital one year before Temple established the health centers.
The CGHS board resulted from a series of community meetings, subsequent to which an election was held to choose community representatives to serve on the board. As determined by PAAC and Temple, the elected community people comprised one third of the CGHS board, one third were appointed by the hospital, and the remaining third by the Area D Community Action Council.
Plaintiff CGHS also provided in its bylaws that one third of the Board would be elected directly by community residents. The CGHS board comprises a cross section of the community and includes school-community coordinators, a housing trainee for the Model Cities Housing Information Center, a worker in Senior Wheels East (a Model Cities senior citizens' program), a taxi driver, a minister, a nun, a businesswoman, and the Deputy Commissioner of Health of the City of Philadelphia. Members of the CGHS board are also associated with numerous other community groups.
The last election for members of plaintiff CGHS was held on March 4, 1971, at the health center at 2539 Germantown Avenue. A description of the manner in which it was conducted is instructive. Approximately three weeks prior to the election, various members of CGHS working with community volunteers from the Hartranft Community Corporation distributed some 2,000 flyers written in English and Spanish door-to-door in the target area served by the CGHS Center. In addition, several posters giving information about the election were displayed in the health center, in the offices of the Council of Spanish-Speaking Organizations, at the Hartranft Community Corporation, and at the Holy Cross Church. The flyers gave notice of the election and invited each prospective candidate to submit a petition with ten signatures supporting his candidacy by February 26, 1971. On February 27, 1971, a list of the ten candidates submitting petitions was prepared by the Election Committee of CGHS. Flyers containing this list and giving the time and place of the election were thereupon distributed door-to-door throughout the target area of the health center. To vote in the election, a voter had to be at least eighteen years old and reside in the target area of the center. Each voter was asked to select five candidates from the list of ten. A total of 126 people voted in the election.
The five candidates receiving the most votes were selected. They were Lucy Smith, Oscar Shambourger, Margaret Jones, Sarah Murdock, and Joel Beamon.
The Board of Directors of the WNT center was originally appointed by Temple and PAAC and community organizations. A broad spectrum of people comprised the WNT board, including a clergyman, an attorney, an equal opportunities specialist with the United States Department of Housing and Urban Development, physicians, school coordinators, and a part-time reading aide with the Philadelphia public schools. Most members of the board were not professionals. When it was established, the advisory board for the West Nicetown-Tioga Neighborhood Family Health Center was an unincorporated association with offices at 3450 N. 17th Street, Philadelphia, and was named the West Nicetown-Tioga Neighborhood Family Health Center Advisory Council. In January 1968 it changed its name to West Nicetown-Tioga Neighborhood Family Health Center Board of Directors. On April 20, 1970, it incorporated as Health Oriented Consumers, Inc. (HOC), a Pennsylvania non-profit corporation.
D. The Boards in Operation: the Roles Which They Assumed; the Roles Which They Claim Were Denied Them; and Their Relationship with Defendants
The foregoing is not intended as a catalogue of the activities of the plaintiff boards, for they performed many functions in the community, and we were impressed with their dedication. Indeed, in their refunding request for October 1, 1970, to September 30, 1971, Temple and PAAC represented to OEO that the functions of the CGHS and WNT advisory boards included, but were not limited to the following:
1. To advise on ways of accomplishing and evaluating the delivery of services and optimum use of the Center.
2. To make recommendations for improvements of the delivery of services.
3. To interpret services of the center to the community.
4. To hear views, complaints and ideas of people in the community in periodic public meetings, as well as informally, and to relay these to the center staff.
5. To assist in recruitment of staff, particularly with regard to the neighborhood health workers and to other staff from the neighborhood, and to serve as a screening function of all new hires prior to their appointment.
6. To participate in the selection of the Center Director.
7. To review and approve all fiscal transactions of Board members.
8. To participate in the development of the Program budget and approve the budget when finalized.
In general terms, we find that plaintiff Boards were not at all certain where authority in the program lay, and were confused as to guidelines and as to their own roles. On June 22, 1970, Harvey N. Schmidt, now a Common Pleas Judge but then a member of HOC and an attorney, wrote to Evans:
I am now deeply concerned with the Board's exact function -- what is its authority, what guidelines control it, etc.? It appears to me from the time that I have been on the Board and from the activities of Temple Hospital itself, that the Board is really a meaningless appendage to the whole program, and, if this is so, I certainly would not want to be any part of it.
While the plaintiff Boards constantly sought clarification of the division between administration and policy, the division was never definitively established.
The most notable and continuing source of friction between the plaintiff Boards and Temple and PAAC over the plaintiffs' role involved the Program Development and Evaluation unit (P.D. & E.) created by Temple to oversee the total health services program.
Members of plaintiff Boards continuously complained about the P.D. & E. unit. They expressed their concern over the various functions of P.D. & E. and over duplication of services rendered by P.D. & E. and the Boards. They felt that the P.D. & E. unit was top-heavy, resulting in too much expenditure on administration instead of services, and were concerned that they were not permitted to screen prospective P.D. & E. employees. But most of all, plaintiffs saw in P.D. & E. a usurpation of the power that they felt belonged to the Boards. P.D. & E. thus became a symbol of plaintiff Boards' frustration at their inability to be a partner in controlling the program, rather than a mere community input factor.
Turning to specifics, the friction between the plaintiff Boards and Temple and PAAC over the question of role and responsibility manifested itself in a number of areas. Inter alia, the Boards felt that: (1) they were insufficiently involved in the program budget (see pp. 1083-1085 infra); (2) they were denied adequate training to fulfill their roles;
(3) they were deprived of input into the process of selecting James N. Snipe as project director of the health services program (see p. 1085 infra), (4) they were not consulted with respect to Snipe's removal on August 12, 1971; (5) they were not consulted with respect to the appointment of Curtis Owens as acting project director to replace Snipe; (6) many of their recommendations as to Health Center operations were ignored, e.g., the recommendation of HOC that the WNT Center be open on Saturdays; (7) they were largely ignored in connection with the institution of the Health Maintenance Plan, now in operation at the centers, which provides comprehensive free health care for public assistance recipients; (see note 11);
(8) Temple and PAAC wrongfully expropriated certain of their records and files; and (9) they were denied the power to hire and fire center personnel, which they felt (because of representations made by PAAC) that they had. We will presently make findings as to whether the plaintiff Boards were accorded their proper function with respect to the program budget and the selection of the project director. Because it is not necessary to the resolution of the case, we make no findings as to which side was justified with respect to the other differences.
As may be surmised from the foregoing, the relationship between the plaintiff Boards and Temple and PAAC was poor, and was pervaded by suspicion and mistrust. On several occasions plaintiffs attempted to bypass the defendants and sought the direct intervention of OEO in the hopes of settling their difficulties. In a letter dated June 29, 1971, to Dr. Leon Cooper, Director of the Comprehensive Health Services Division of OEO in Washington, D.C., Elizabeth J. Wilson, Chairman of HOC's Board, observed:
Neither Temple University nor PAAC has been willing to negotiate an honest relationship with us, and we have been spinning our wheels over many minor problems while we have been rubber-stamping important documents and decisions made by the health providers which we did not understand at the time and have lived to regret.
Mrs. Wilson had previously sought Dr. Cooper's help after appealing to Hardy without receiving satisfaction. Indeed, the attitude which spawned this very lawsuit is articulated in a HOC position paper approved by its Board in November 1971, which asserts that Temple and PAAC set up the plaintiff Boards as "straw boards" and conspired to disband them and replace them with a real "straw board" as soon as the plaintiffs sought to strengthen the program. These findings with respect to the poor relationship between the plaintiff Boards and PAAC and Temple will assume great importance in the merger and displacement issue; indeed, they constitute the proximate background without which these issues cannot be fully understood.
A final finding in this area is that on or about August 17, 1971, representatives of Temple and PAAC transferred certain records, files and documents which plaintiffs believed belonged to them from the centers to the Beury Building. Plaintiffs were not consulted prior to the transfer of said property by any representative of Temple and PAAC, and were denied further access to the property except on a limited basis during the course of litigation.
E. The Plaintiff Boards' Involvement in the Program Budget
Gloria Martin was a former chairman of the Finance Committee of WNT. She testified that:
I was involved with the budget in that the budget was brought to us; and we went through the budget and took recommendations back to the Board. We were not involved in the writing up of the entire budget. . . . It was just brought to us for approval or recommendation for approval from the Board. . . . Well, we examined it but we really didn't help put it together. In other words, it was brought already made up, except for our own Board budget, the West Nicetown-Tioga budget. That was part of the over-all budget. That was the only thing we were involved in.
(N.T. 161-63). Mrs. Martin went on:
Q. You were involved in preparing the budget for your Board?
A. That was the only thing.
Q. And the other part of it related to what?
A. The over-all program and the centers. We weren't allowed to do anything with that -- just, you know, scan through it more or less and bring recommendations to the Board.
Q. Was it clear when you scanned through it what it meant?
A. No, not all the time. But we couldn't really change anything. And this is all we could do.
Q. Well, when it was unclear did you request any clarification?
A. We did but the clarification was unclear also.
Q. Did it always come to you in a package form completed?
A. We received numerous materials on different forms on how to put it together, but we were never told how to fill out those forms and put it together.
Q. How did you receive it? Did you receive it at home?
A. Yes, through the mails, just pieces of materials.
Q. Did you as a Board member and the Board as you know it want to influence ...