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Staten v. Housing Authority

UNITED STATES COURT OF APPEALS, THIRD CIRCUIT


decided: November 25, 1980.

SHIRLEY STATEN, INDIVIDUALLY AND ON BEHALF OF ALL OTHER PERSONS SIMILARLY SITUATED, APPELLANT
v.
HOUSING AUTHORITY OF THE CITY OF PITTSBURGH, A PUBLIC CORPORATION, DANIEL A. PIETRAGALLO, INDIVIDUALLY AND AS EXECUTIVE DIRECTOR OF THE HOUSING AUTHORITY OF THE CITY OF PITTSBURGH AND WILLIAM COLBERT, PAUL BROPHY, CARRIE WASHINGTON, WILLIAM COYNE, FRED GUALTIERI, RUTH PITTRELL AND JAMES REICH, INDIVIDUALLY AND AS MEMBERS OF THE BOARD OF DIRECTORS OF THE HOUSING AUTHORITY OF THE CITY OF PITTSBURGH AND THEIR AGENTS AND SUCCESSORS IN OFFICE, APPELLEES

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF WESTERN PENNSYLVANIA (D.C. Civil No. 78-1359)

Before Adams, Hunter and Higginbotham, Circuit Judges.

Author: Hunter

Opinion OF THE COURT

1. In this appeal, plaintiffs ask this court to reverse the trial court's denial of their motion for attorneys' fees. Plaintiffs sought attorneys' fees under the Civil Rights Attorneys' Fees Awards Act of 1976, 42 U.S.C. § 1988 (1976), as prevailing parties in an action under the 1871 Civil Rights Act, 42 U.S.C. § 1983 (1976). The district court denied their motion, finding that the defendant housing authority was an agent of the federal government, immune under 28 U.S.C. § 2412 (1976), from the operation of section 1988. Additionally, the district court found that if it had erred as to the Housing Authority's status, it would nonetheless decline to exercise its discretion in favor of an award of fees for the plaintiffs. We disagree with both findings by the district court. The defendant is not immune under section 2412 from an award of attorneys' fees. Therefore, the district court should have awarded attorneys' fees against defendant unless it found "special circumstances" making the award of attorneys' fees in this case unjust.*fn1 Since the district court did not make such a finding, we vacate the lower court's judgment and remand with instructions that it exercise its discretion in accordance with the standard set forth in this opinion.

I. FACTS:

2. In November, 1978, appellants filed an action in the Western District of Pennsylvania alleging that the defendant Housing Authority terminated their leases and instituted state eviction proceedings without providing sufficient notice as mandated by 42 U.S.C. § 1437d (Supp. II, 1978), the regulations promulgated thereunder at 24 C.F.R. 866 (1978), and the policy set forth in the Public Housing Occupancy Handbook, 7465.1 Rev. Plaintiffs further alleged that the Housing Authority's practices violated their fourteenth amendment due process rights. The district court issued a preliminary injunction in favor of plaintiffs on December 15, 1978, enjoining the eviction action and setting the matter for hearing. After a hearing, the district court entered an order in favor of plaintiffs holding that the Housing Authority's policies violated federal regulations and state law. The defendants were enjoined from bringing eviction actions until they complied with federal regulations. The court also directed the Housing Authority to institute a system of notices in compliance with the applicable regulations. Staten v. Housing Authority of the City of Pittsburgh, 469 F. Supp. 1013 (W.D.Pa.1979). Appellees have not challenged this decision.

3. On August 22, 1979, plaintiffs' counsel filed a motion for costs and attorneys' fees pursuant to Rule 54(d) of the Federal Rules of Civil Procedure and 42 U.S.C. § 1988. Opposing the motion, the Authority contended and the district court concluded that the Housing Authority was an "agent" of the United States and thereby entitled to immunity from the Civil Rights Attorneys' Fees Award Act of 1976, by reason of 28 U.S.C. § 2412. The district court denied appellant's motion for fees.

4. The Housing Authority of the City of Pittsburgh, is a public corporation created under the Pennsylvania Housing Authorities Law, 1937, May 28, P.L. 955 §§ 1-24, 35 Pa.Cons.Stat.Ann. §§ 1541-64 (Purdon 1980), and in accordance with the United States Housing Act of 1937, 84 Stat. 1779, 42 U.S.C. §§ 1437-40 (Supp. II, 1978) with the powers, among others, to sue and be sued, and to build or acquire housing projects and lease the dwellings therein. The Housing Authority receives funding for its projects from several sources. Under 35 Pa.Cons.Stat.Ann. §§ 1557-58 (Purdon 1977) the Housing Authority has the power to issue bonds to raise revenue for its projects. In addition, the Housing Authority has extensive financial ties with the federal government, receiving annual grants if it complies with federal regulations. 42 U.S.C. § 1440(c), (d), (e) (1976); 35 Pa.Cons.Stat.Ann. § 1562 (Purdon 1977). The state government serves as yet another source of income for Housing Authority projects. 35 Pa.Cons.Ann. § 1562.1 (Purdon 1977).

5. The daily operation and implementation of Housing Authority policies is supervised by defendant, Daniel A. Pietragallo, Executive Director of the Housing Authority. A city-appointed Board of Directors is responsible for the formulation of Authority policy. 35 Pa.Cons.Stat.Ann. § 1545 (Purdon 1977). In formulating those policies, the Board is guided, in part, by federally established standards. 42 U.S.C. § 1437d(c); Public Housing Occupancy Handbook §§ 4-16 (1978).

6. Appellee asserts that the economic and legal relationship between the defendant Housing Authority and the federal government makes an award of attorneys' fees against the Housing Authority tantamount to an award of fees against an "agency" of the United States. We disagree.

II. DISCUSSION:

A. Section 2412

7. Appellant sought attorneys' fees under the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988 (1976) (hereinafter "Fees Act").*fn2 Intended as an incentive for the private enforcement of civil rights,*fn3 section 1988 serves as a general avenue for the award of attorneys' fees following a section 1983 action. Maher v. Gagne, 448 U.S. 122, 100 S. Ct. 2570, 65 L. Ed. 2d 653 (1980); Maine v. Thiboutot, 448 U.S. 1, 100 S. Ct. 2502, 65 L. Ed. 2d 555 (1980); Ross v. Horn, 598 F.2d 1312 (3d Cir. 1979), cert. denied, 448 U.S. 906, 100 S. Ct. 3048, 65 L. Ed. 2d 1136 (1980); Skehan v. Bd. of Trustees, 590 F.2d 470 (3d Cir. 1978), cert. denied, 444 U.S. 832, 100 S. Ct. 61, 62 L. Ed. 2d 41 (1979).

8. The road to collecting attorneys' fees under section 1988 is not, however, clear of obstacles. This court has held that the Fees Act is not a waiver of the sovereign immunity of the United States and, therefore, does not permit an award of counsel fees against the United States. Shannon v. United States Department of Housing and Urban Development, 577 F.2d 854, 855-56 (3d Cir. 1978), cert. denied, 439 U.S. 1002, 99 S. Ct. 611, 58 L. Ed. 2d 677 (1978). Fee awards against the United States are generally prohibited by the express assertion of sovereign immunity found in 28 U.S.C. § 2412 (Supp. II, 1978):

Except as otherwise specifically provided by statute, a judgment for costs, as enumerated in section 1920 of this title but not including the fees and expenses of attorneys may be awarded to the prevailing party in any civil action brought by or against the United States or, any agency or official of the United States acting in his official capacity, in any court having jurisdiction of such action....

Since there is no other statute specifically providing for attorneys' fees in the present situation, this court must determine whether the defendant Housing Authority is an "agency" or "official"*fn4 of the United States shielded by section 2412 from an award of attorneys' fees under section 1988.*fn5

9. The district court suggested that the Housing Authority is an "agent" of the United States because the Pennsylvania legislature explicitly created the Authority "(t)o cooperate with and act as agent of the Federal Government for the public purposes set out in this act in connection with the acquisition, construction, operation or management of any housing project or part thereof." 35 Pa.Cons.Stat.Ann. § 1550(g) (emphasis added).

10. The district court correctly notes, however, that other parts of the Pennsylvania Act portrays the Housing Authority as a creature of state statute, with a state identity for many purposes. See, e. g., 35 Pa.Cons.Stat.Ann. § 1550 (Purdon 1980) (prologue) ("An Authority shall constitute a public body, corporate and politic, exercising public powers of the Commonwealth as an agency thereof." (emphasis added)). The Pennsylvania legislature's intentions with regard to the Authority's status as a federal "agency" for all purposes is then, at best, unclear.

11. The question of whether the housing authority is an "agency" or "official" of the United States, immune under section 2412, is a question of federal law and not a decision for the states.*fn6 See Chase Manhattan Bank, N.A. v. Finance Administration City of New York, 440 U.S. 447, 99 S. Ct. 1201, 59 L. Ed. 2d 445 (1979) (per curiam) (the classification of a tax for purposes of a federal law is not controlled by the state's treatment of that tax). See also United States v. Bedford, 519 F.2d 650, 654 n.3 (3d Cir. 1975), cert. denied, 424 U.S. 917, 96 S. Ct. 1120, 47 L. Ed. 2d 323 (1976) ("It is a recognized principle that a federal court is not bound by a state ... interpretation of federal laws....").

12. The Pittsburgh Housing Authority is a creature of state law which, by federal law, has a unique relationship with the federal government. While a great deal of funding for the Housing Authority comes from the federal government, that funding alone does not establish an agency relationship between the Housing Authority and the federal government.*fn7 Rather, if the State agency qualifies for Federal assistance (42 U.S.C. § 1440(b)(1)), the federal government becomes a guarantor of the Authority's obligations. The federal funds merely guarantee Housing Authority projects; they are not segregated funds exposed to attorneys' fees action.*fn8

13. Our courts have recognized since 1935*fn9 that the decentralized public housing program works through a dual network of federal and state agencies,*fn10 not through the federal government's sole and direct control over the housing projects.*fn11 Against this background, the district court erred in finding that a local agency that receives some federal funding is necessarily an "agency" of the United States immune under section 2412. Funding is certainly one indication of whether an Authority is an extension of the United States; it is not, however, determinative. We must also consider the Agency's exclusive control over the federal grant funds, its freedom from federal involvement or control over the daily management and operation of the Authority, and the fact that the Housing Authority was created by and continues to be governed in accordance with state law. Cf. United States v. Orleans, 425 U.S. 807, 816-18, 96 S. Ct. 1971, 1976, 48 L. Ed. 2d 390 (1976) (The mere existence of federal funding or federal regulations influencing a local agency's policies and programs does not designate the local agency as an agent of the United States liable for damages under the Federal Tort Claims Act). Given both the federal and state statutory schemes for Housing Authorities, we find that defendant, Housing Authority is not an "agency" of the United States immune under section 2412.

B. "Special Circumstances" Standard

14. Upon remand, it will be within the district court's discretion to decide whether appellant is entitled to attorneys' fees under section 1988. It must, however, exercise this discretion in accordance with the proper standard for granting such fees.

A party seeking to enforce the rights protected by the statutes covered by (§ 1988), if successful, should ordinarily recover attorneys' fees unless special circumstances would render such an award unjust.

Skehan v. Bd. of Trustees, 590 F.2d 470, 496 (3d Cir. 1978), cert. denied, 444 U.S. 832, 100 S. Ct. 61, 62 L. Ed. 2d 41 (1979), citing S.Rep.No.94-1011, 94th Cong., 2d Sess. 4, reprinted in (1976) U.S.Code Cong. & Admin.News, pp. 5908, 5912 (emphasis added). See also Ross v. Horn, 598 F.2d 1312 (3d Cir. 1979), cert. denied, 448 U.S. 906, 100 S. Ct. 3048, 65 L. Ed. 2d 1136 (June 24, 1980); Sethy v. Alameda County Water District, 602 F.2d 894 (9th Cir. 1979), cert. denied, 444 U.S. 1046, 100 S. Ct. 734, 62 L. Ed. 2d 731 (1980); Dawson v. Pastrick, 600 F.2d 70 (7th Cir. 1979); Bonnes v. Long, 599 F.2d 1316 (4th Cir. 1979); Mid-Hudson Legal Services, Inc. v. G & U, Inc., 578 F.2d 34 (2nd Cir. 1978); Brown v. Culpepper, 559 F.2d 274 (5th Cir. 1977).

15. The district court failed to apply the proper standard in appellant's case.*fn12 The district court stated that it would decline to award attorneys' fees because the case was "simple" and should be "handled routinely." Simplicity, by itself, however, is not a "special circumstance" justifying a denial of attorneys' fees in a section 1983 case.*fn13 Rather, it is but one of the factors to be considered in determining the amount of the fees award. See Hughes v. Repko, 578 F.2d 483, 487 (3d Cir. 1978); Swicker v. William Armstrong & Sons, Inc., 484 F. Supp. 762, 767 (E.D.Pa.1980). Whether the appellant is entitled to a fees award should be determined by whether her case acted as a "catalyst" for the vindication of her constitutional rights. Ross, 598 F.2d at 1322. If appellant's claims were "substantial" or not "frivolous" (Gagne v. Maher, 594 F.2d 336 (2d Cir. 1979); Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir. 1978)), they may serve as a basis for attorneys' fees under section 1988. See also Sharrock v. Harris, 489 F. Supp. 913 (S.D.N.Y.1980).

16. We remand this case to the district court so that it may decide whether there are any "special circumstances" making the award in this case unjust. If the district court does not find any such circumstances, it should award attorneys' fees in accordance with the standard set forth in Hughes v. Repko, 578 F.2d 483 (3d Cir. 1978). See also Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).

17. Accordingly, the district court's judgment is vacated and the case remanded for further proceedings in accordance with this court's judgment.


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