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LOUIS v. PENNSYLVANIA INDUS. DEV. AUTH.

January 18, 1974

Nadine LOUIS, by her mother and natural guardian, May Louis, and West Philadelphia Branch, National Association for the Advancement of Colored People, on behalf of themselves and all others similarly situated,
v.
The PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY et al.


Ditter, District Judge.


The opinion of the court was delivered by: DITTER

 The plaintiffs are seven individuals and the West Philadelphia Branch, National Association for the Advancement of Colored People. Named as defendants are the Pennsylvania Industrial Development Authority (PIDA), the Delaware County Industrial Development Corporation (DCIDC), and the Chilton Company, an industrial firm with its principal place of business in Philadelphia. That part of the case presently before me for decision is the allegation that PIDA and DCIDC are violating the Civil Rights Acts of 1866 and 1871, 42 U.S.C. §§ 1981 and 1983, and the Fourteenth Amendment to the United States Constitution by failing to consider whether business enterprises receiving PIDA loans are unlawfully and unconstitutionally discriminating against minorities. Plaintiffs seek to enjoin permanently PIDA and DCIDC from processing, approving, and granting loans until such time as said defendants develop criteria and procedures to determine whether applicants for their loans are discriminating against minorities.

 I. BACKGROUND

 Since 1956, Pennsylvania has underwritten a statutory program *fn1" designed to attract and keep industry within its borders. As the administering office, PIDA makes loans, through local industrial development agencies such as DCIDC, to companies which locate in critical economic areas. PIDA can loan 40 or 45% of the cost of a project (depending on the type of project) at a very low rate of interest. There is no provision in the statute for investigating whether or not a benefiting company discriminates against minorities in employment. PIDA has not instituted any such investigatory process, there is no provision in its budget for such a procedure, and there have been no complaints to PIDA that any of the loan recipients discriminated against minorities. Nevertheless, there is an anti-discrimination clause in the closing documents for all PIDA loans. *fn2" There have been no defaults under these provisions.

 During June and July of 1971, DCIDC applied to PIDA for $4,080,000 to help finance the construction of new facilities for the Chilton Company in Radnor Township, Delaware County. *fn3" Chilton, primarily a publisher, printer and market researcher, is a Delaware corporation with its principal offices at 56th and Chestnut Streets, Philadelphia. It also has facilities at 401 Walnut Street, Philadelphia, and One Decker Square, Bala Cynwyd, as well as an office in Pittsburgh. At the time of this suit, Chilton employed 1115 people at 56th and Chestnut, of which 17.5% were black; 305 employees at One Decker Square, of which about 1.6% were black, and 60 employees at its offices at 401 Walnut, of which about 10% were black. *fn4" Chilton had been seriously considering moving its operations to the State of Delaware. Had it done so, approximately 1500 jobs would have been lost to the Philadelphia area. The purpose of the PIDA loan was to provide an incentive to keep Chilton from leaving the Commonwealth. PIDA tentatively confirmed its loan to Chilton in August, 1971, and finally approved it, December, 1971, or January, 1972. *fn5"

 On April 20, 1972, this suit was filed, seeking to stop the Chilton loan, as well as all other PIDA loans. Plaintiffs contend first that by failing to consider whether businesses receiving PIDA loans are discriminating against Blacks, PIDA and DCIDC are violating 42 U.S.C. §§ 1981, 1983, and the Fourteenth Amendment to the United States Constitution. Second, plaintiffs allege that Chilton discriminates against Blacks in its employment practices, and in its attempt to relocate its offices outside of Philadelphia, in violation of 42 U.S.C. § 1981. Third, plaintiffs contend that PIDA and DCIDC fostered and promoted the discrimination practiced by Chilton by processing and approving its loan application in violation of 42 U.S.C. §§ 1981, and 1983 and the Fourteenth Amendment. Finally, plaintiffs contend that all of the defendants have violated the Thirteenth Amendment.

 To correct these wrongs, plaintiffs sought a declaratory judgment declaring the alleged discriminatory acts of all defendants to be in violation of the law; temporary and permanent injunctive relief enjoining the Chilton loan; permanent injunctive relief preventing PIDA and DCIDC from making any loans until standards and procedures are set up to determine whether applicants for loans are discriminating against minorities; an injunction against discrimination aimed at Blacks allegedly practiced by Chilton; a requirement that Chilton adopt an affirmative action plan; and a requirement that Chilton employ plaintiff, Nadine Louis.

 At this time the only issue before me is whether PIDA must develop criteria and procedures to determine whether applicants for loans are discriminating against minorities. *fn6" By informal agreement among counsel, all other issues involving PIDA, DCIDC and Chilton have been tentatively resolved. This settlement will become final after a decision concerning PIDA's standards. However, all parties agree that this tentative settlement is not to affect plaintiffs' standing.

 II. THE PLAINTIFFS

 The threshold question in this case concerns the plaintiffs, their allegations, and their proofs.

 The concept of standing requires that plaintiffs demonstrate that they have been injured. Here the NAACP, appearing as an organization seeking to represent its members, alleges a long history of concern in racial and civil rights problems, and claims a "direct and immediate interest in eliminating discrimination." *fn7" These averments were expanded to recite the NAACP's advice and assistance to unemployed members seeking work. *fn8" In addition, the intervenor plaintiffs allege that this organization is a source of aid and advice to those seeking jobs. However, despite interest and history, there is no allegation of injury to the NAACP or its members. The record is barren of evidence that any member was ever denied employment at Chilton. Since there is neither allegation nor proof that a single member has been injured, NAACP v. Button, 371 U.S. 415, 83 S. Ct. 328, 9 L. Ed. 2d 405 (1963) is not in point. In order to represent its members, an organization must allege harm or injury to them. The NAACP stands in the same position as did the Sierra Club in Sierra Club v. Morton, 405 U.S. 727, 92 S. Ct. 1361, 31 L. Ed. 2d 636 (1972). It has no personal stake in the controversy, and thus lacks the required standing to be a plaintiff here. Id. at 730, 92 S. Ct. at 1364-1369.

 Plaintiff, Nadine Louis, did not appear as a witness at the hearings in this case, but her testimony was received through deposition. On August 5, 1970, while a 17 year old junior in high school, Miss Louis handed a job application form to a security guard at the Chilton plant. Although the guards are not Chilton employees, her application for employment in the research department was delivered to the personnel office. The form indicated that the plaintiff expected to graduate from high school in 1971, and the application was therefore deemed to be one for either temporary summer work or for part-time work after school. Since neither type of employee was being hired at that time, the form was placed with the part-time applications. In the event that a need for part-time employees arose during the next three months, her application, along with any others received during that period, would have been available to the personnel department.

 Several weeks later, Miss Louis stated that she placed a telephone call to Chilton. While waiting for the switchboard to connect her with the personnel office, she was apparently disconnected. She made no further attempt to contact the defendant. She did not call again, come to Chilton for an interview, write, or in any other manner make any inquiry as to the status of her application. Chilton sent no letter to Miss Louis, but apparently treated her application in accordance with the standard policy of the company, which necessitated not acknowledging the large number of unsolicited applications unless and until a job opening existed. Nothing more was heard from or regarding Nadine Louis or her application until April 20, 1972, when the instant civil rights action was filed. Her entire assertion that Chilton discriminates against Blacks, and thus the foundation for this action, is based on the events just related. The illogic and tenuity of this argument is readily apparent. No possible interpretation of the above facts would allow a finding that Nadine Louis was the victim of discrimination by Chilton.

 Two petitions were presented both during and after the hearings in this case to allow six additional persons to intervene as party plaintiffs. I granted both requests.

 In their petitions the intervenor plaintiffs alleged that they were either fired or not hired because they were Black. No evidence was presented at the hearings, nor has anyone asked for additional opportunity to present facts to substantiate these claims. Mere allegations are not sufficient to ...


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