APPEAL FROM A JUDGMENT OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA.
Van Dusen, Weis and Garth, Circuit Judges.
We are called upon to resolve a conflict between the Mayor of Philadelphia, the Honorable Frank Rizzo, and the Philadelphia Anti-Poverty Action Commission ("PAAC"). For reasons other than those articulated by the District Court,*fn1 we conclude that it was proper for the Court to refuse the relief sought against Mayor Rizzo.
Melvin Hardy (a former Executive Director of PAAC), Isaiah Crippins (a former General Counsel of PAAC), and PAAC commenced this action in the District Court for the Eastern District of Pennsylvania on April 27, 1973. Their complaint includes a variety of claims concerning the alleged interference of Mayor Rizzo with the functioning of the anti-poverty agency. By far the most prominent of these claims is the charge that the Mayor violated federal law by removing Melvin Hardy as the Executive Director of PAAC and by refusing to renew Mr. Crippins' contract as General Counsel. Less precise, but still present in the complaint, are charges that: (1) the Mayor illegally blocked appointments to PAAC made by its Executive Director; (2) the Mayor appointed persons to the PAAC Board illegally; (3) the Mayor convened PAAC meetings illegally; and (4) the Mayor defamed each of the plaintiffs. The complaint seeks declaratory and injunctive relief, as well as compensatory and punitive damages.
Four days after the above action was commenced, the City of Philadelphia instituted an action in state court against Hardy and Crippins, seeking to restrain the defendants from exercising their duties as Executive Director and General Counsel of PAAC.*fn2 On May 3, 1973, Melvin Hardy and Isaiah Crippins removed the City's action to the District Court for the Eastern District of Pennsylvania, pursuant to 28 U.S.C. § 1441. Perceiving a close similarity between the two actions, the District Court then consolidated the original action brought by PAAC, Hardy and Crippins (District Court No. 73-957) with the City's removed action (District Court No. 73-990). On May 10, 1973, the Court conducted a one day hearing on the merits of the consolidated case.
After the hearing, the City moved for dismissal of No. 73-957 and for remand of No. 73-990 on the grounds of lack of subject matter jurisdiction. These motions were denied sub silentio by the District Court. In a memorandum opinion, the District Court found that:
(1) subject matter jurisdiction exists (pursuant to 28 U.S.C. § 1331) for the District Court to consider all matters raised in the consolidated actions; and
(2) federal law permits the Mayor to remove PAAC's Executive Director and to refuse to renew the contract of PAAC's General Counsel.
With regard to the peripheral matters raised in PAAC's original complaint, the Court stated:
We have not considered the myriad of other allegations and issues raised in the pleadings for the following reasons: (a) no evidence was presented at the hearing in connection therewith; (b) these matters were not briefed by the parties; and (c) in view of the issues decided herein, the other allegations and issues raised in the pleadings now appear moot.
Judgment was thereupon entered in favor of the defendants in No. 73-957 and in favor of the plaintiff in No. 73-990. PAAC and Hardy appeal pursuant to 28 U.S.C. § 1291.*fn3
To understand the District Court's primary conclusions, it is necessary to trace briefly the history of relevant anti-poverty legislation. As part of the Economic Opportunity Act of 1964, Congress established a Community Action Program. This Program encouraged the development of local agencies to provide multiple services to impoverished communities. Originally, the Program envisioned as a goal the "maximum feasible" participation of the poor in the development of Community Action Programs. By 1967, however, Congress recognized that the Community Action Program could not succeed without the support of locally elected officials. See 1967 U.S. Code, Congressional & Administrative News at 2448-9 (excerpted from House Report No. 866, 90th Cong., 1st Sess. 1967).
On December 23, 1967, Congress enacted the Green Amendments to the Economic Opportunity Act of 1964. These Amendments gave flexibility to the Community Action Program, permitting localities a choice in the type of "community action agency" that would qualify for federal funding. Under the Green Amendments, the agency may either be a "State or political subdivision of a State (having elected or duly appointed governing officials), or a combination of such political subdivisions" or it may be a "public or private non-profit agency or organization which has been designated by a State or such a political subdivisions." 42 U.S.C. § 2790(a). The former administers its program through a community action board,*fn4 while the latter administers its program through a governing board. 42 U.S.C. § 2791(a).*fn5
The Economic Opportunity Act is somewhat imprecise with regard to the distinctions between the two types of boards. A governing board has the power to "appoint persons to senior staff positions, to determine major personnel, fiscal, and program policies, to approve overall program plans and priorities, and to assure compliance with conditions of and approve proposals for financial assistance under this subchapter." 42 U.S.C. § 2791(e). The parallel powers of a community action board, on the other hand, are not made explicit by the statute. The Office of Economic Opportunity, however, has explained that in jurisdictions with community action boards, the "governing officials"*fn6 will exercise the same powers that governing boards exercise, unless the officials delegate these powers to the community action boards. OEO Community Action Program Memorandum No. 81 at 5.
In determining whether PAAC or Mayor Rizzo had the authority to remove Hardy, the District Court focused upon the fact that the appointive powers of community action agencies differ, depending upon whether the agency is administered by a governing board (lodging the appointive powers in the board itself) or by a community action board (lodging the appointive powers in governing officials). The court thus posed as determinative the issue as to whether PAAC " . . . is a political subdivision of the City of Philadelphia ...