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TENANTS FOR JUSTICE v. HILLS

September 15, 1975

TENANTS FOR JUSTICE, an unincorporated association, by its president, Leon Michael, et al., Plaintiffs,
v.
Carla A. HILLS, Secretary of the United States Department of Housing and Urban Development, et al., Defendants



The opinion of the court was delivered by: FULLAM

 FULLAM, District Judge.

 Plaintiffs are tenants and former tenants in a low-income housing development in Lancaster, Pennsylvania, known as Duke Manor. Funds for construction of the project were obtained through a mortgage loan insured and subsidized by the defendant HUD, pursuant to § 221(d)(3) of the National Housing Act. The original owner of the project, a non-profit corporation, defaulted, and HUD acquired ownership of the property through a foreclosure sale in 1973, at a bid price of $921,132.

 As of December 17, 1974, HUD sold the project to the defendant Duke Manor Apartments, Inc. for a cash price of $335,000 ($318,250 net to HUD), and did not retain any control over the determination of the amount of rent to be charged to the tenants, substantially all of whom are persons of low or moderate income.

 The new owner (hereinafter referred to as "the corporation" or "the landlord") has repeatedly increased the rent charged to the tenants, in amounts aggregating, on the average, about 37% as of July 1, 1975. The tenants organized and instituted a "rent strike," in consequence of which: (a) certain rentals have been paid into an escrow account under the control of representatives of the tenants; (b) certain of these accumulated rentals were paid over to the landlord in exchange for its agreement to reduce the amount of rent for the month of July 1975 by 25%, in settlement of a dispute concerning alleged infestation of the premises by vermin; and (c) no rental payments have been made to the landlord for the months of August or September.

 The corporation threatens to evict those tenants who fail to pay the demanded rent in full. The case is now before the Court on plaintiffs' motion for a preliminary injunction to block the threatened evictions. On September 3, 1975, I issued a temporary restraining order pending hearing on plaintiffs' motion. The hearing was held on September 8 and 10, 1975.

 Plaintiffs' complaint raises many issues. The principal points may be summarized as follows:

 1. Plaintiffs were deprived of due process when, without notice or hearing, HUD disposed of the property in a manner which abruptly terminated its character as a low-income housing project and transferred it to the private-enterprise free market.

 2. HUD violated its own regulations by failing to give adequate consideration to alternative methods of disposition which would have preserved the original status of the project.

 4. HUD violated its own regulations, and the Environmental Protection Act, by failing to prepare and file and process an environmental impact statement.

 Among other things, plaintiffs, by reason of the foregoing alleged violations, seek to set aside the conveyance to the corporation, and to have the property restored to its "public housing" status, so as to enable low-income tenants to continue to occupy the project at prices they can afford to pay.

 I. Jurisdiction

 I am satisfied that there is jurisdiction with respect to the claim against the federal defendants under 28 U.S.C. § 1337, see Davis v. Romney, 490 F.2d 1360, 1365-66 (3d Cir. 1974); and 28 U.S.C. § 1361, see Langevin v. Chenango Court, Inc., 447 F.2d 296 (2d Cir. 1971); Hahn v. Gottlieb, 430 F.2d 1243, 1245 n. 1 (1st Cir. 1970). Since plaintiffs' claims against the remaining defendants arise in part under the same statutes, since the corporate defendant is the grantee in the conveyance which plaintiffs seek to set aside, and since all of the non-federal defendants are proper targets for the interim injunctive relief which plaintiffs seek in order to preserve the status quo pending determination of their ...


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