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BURNEY v. HOUSING AUTH. OF BEAVER

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA


August 20, 1982

THERESA BURNEY, SILEATHA FERGUSON, BRENDA JACKSON, ROSE ANN JOHNSON, and STACEY GLOVER, individually and on behalf of all others similarly situated, and ARLENE GOOSBY; GIA FLANNIGAN, JOANN POWELL and LEILA SMITH, Plaintiffs
v.
HOUSING AUTHORITY OF THE COUNTY OF BEAVER, JAMES F. TRESS, individually and in his capacity as Executive Director of the Housing Authority of the County of Beaver, JOHN F. PHILLIPS, individually and as Chairman of the Board of Commissioners of the Housing Authority of the County of Beaver, Their Agents, Successors in Office, and Persons acting under their direction, and HOMER C. FLOYD, Executive Director, Pennsylvania Human Relations Commission, Defendants

The opinion of the court was delivered by: COHILL

COHILL, D.J.

 Robert Burns' oft-quoted maxim "the best laid schemes o' mice and men gang aft a-gley" perhaps best describes the attempts of the defendants, the Housing Authority of the County of Beaver ("Housing Authority") and the Pennsylvania Human Relations Commission ("Commission") to design a plan to achieve and maintain integration in the Housing Authority's low-income, public housing projects. On October 6, 1978, the plaintiffs herein filed a class action challenging both the plan and the Housing Authority's implementation of that plan. We conducted a six-day non-jury trial and now make the following findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

 Introduction

 Two actions, Theresa Burney v. Housing Authority of the County of Beaver, Civil Action Number 78-1137, and Leila Smith v. Housing Authority of the County of Beaver, Civil Action Number 79-999, were consolidated for trial before this court by the late Judge Daniel Snyder. We have divided this opinion into two parts and will separately address each of these cases. Because the evidence presented at trial and counsels' subsequent arguments focused predominantly on the allegations contained in the Burney complaint, it is that case upon which we focus our primary attention and to which we turn first.

 I.

 Theresa Burney v. Housing Authority of the County of Beaver

 A.) The Parties

 The named plaintiffs, Theresa Burney, Sileatha Ferguson, Brenda Jackson, Rose Ann Johnson, Stacey Glover, Arlene Goosby, Gia Flannigan, Joann Powell, and Leila Smith are black women, each of whom was an applicant on a waiting list for placement in one of the Housing Authority's projects at the time that this lawsuit was filed. These named plaintiffs represent a class defined as "all minority low income individuals who have applied for public housing with Defendants and all minority low income individuals who will apply for public housing with Defendants."

  Defendant, Housing Authority, is a public housing authority of the Commonwealth of Pennsylvania. It was established in 1940 pursuant to the "Housing Authorities Law" of Pennsylvania, 35 Pa. Cons. Stat. Ann. §§ 1541-64 (Purdon 1980), and in accordance with the United States Housing Act of 1937, 42 U.S.C. §§ 1437-40 (Supp. II 1978). The Housing Authority is authorized to build, operate and maintain public housing for the purpose of "providing safe and sanitary dwelling accommodations for persons of low income. . . ." 35 Pa. Cons. Stat. Ann. § 1542. The Housing Authority currently owns, operates and manages 1,040 low-rent family housing units in sixteen housing projects situated in seven municipalities in Beaver County, Pennsylvania.

 Defendant, Commission, is the body charged by the Pennsylvania General Assembly with the responsibility for enforcing the Pennsylvania Human Relations Act, 43 Pa. Stat. Ann. tit. 43, §§ 951-963 (Purdon 1964). That Act prohibits, inter alia, racial discrimination or segregation in public housing. On June 3, 1981, we granted the Commission's motion to substitute the name of its Executive Director, Homer C. Floyd, for that of the Commission itself, as a defendant in this case.

 Defendant, James F. Tress, at all relevant times, was the Executive Director of the Beaver County Housing Authority, and as such, was empowered by law to administer and manage the Housing Authority's projects.

 Defendant, John F. Phillips, at all relevant times, was the Chairman of the Beaver County Housing Authority.

 B.) Background

 Before outlining plaintiffs' claims and the many-sided statutory and constitutional arguments of the parties, it is necessary to set forth in some detail the development and implementation of the challenged Consent Order and Decree, as supported by the record before this court.

 On August 25, 1971, the Commission filed a formal complaint against the Housing Authority charging that the Housing Authority had violated, and was continuing to violate, section 5(h) (1) of the Pennsylvania Human Relations Act, 43 P.S.A. § 955(h) (1), by maintaining housing projects that were segregated by the race of the tenant. The complaint resulted from a Commission evaluation of Housing Authority statistics, which revealed significant disparities in racial composition among the projects it operates. After determining that there was probable cause to credit the allegations contained in the complaint, Commission staff attempted to resolve the disputed matters by settlement and conciliation, as mandated by section 9 of the Pennsylvania Human Relations Act, 43 P.S.A. § 959. The result of these efforts was the execution of a Consent Order and Decree [hereinafter referred to as the Consent Order] between the Housing Authority and the Commission on August 20, 1975. On October 26, 1975, the Consent Order was entered into the official record of the Pennsylvania Human Relations Commission as a Final Order. The parties agreed that the Consent Order was to have the full force and effect of a Commission Order and Decree following a public hearing and that it was to be enforceable under section 10 of the Pennsylvania Human Relations Act.

 The Consent Order was designed to desegregate the Housing Authority's low income housing projects as quickly as possible without disturbing the tenants already residing therein. This was to be accomplished through the use of a new tenant selection and assignment procedure. The key feature of the procedure is the creation of a target racial balance for each of the Housing Authority's family projects *fn1" and the use of an applicant's race as a preferential determinant in order to reach and maintain that target balance.

 More specifically, the Consent Order and the Addendum thereto, which contains a detailed implementation plan, establish the following tenant selection and assignment procedure. Beaver County, wherein all of the Housing Authority's projects are located, is divided into five geographic districts, in each of which is at least one family project. The district divisions and projects are as follows:

 District I

 1) Linmar Terrace

 2) Griffith Heights

 3) Linmar Terrace Extension

 4) Eleanor Roosevelt Site I

 5) Eleanor Roosevelt Site 2 (Elderly)

 6) Sheffield Towers (Elderly)

 District II

 1) Economy Village

 2) Crestview Village

 3) J.F. Kennedy

 4) Ambridge Towers (Elderly)

 District III

 1) Morado Dwellings

 2) Harmony Dwellings

 3) Pleasantview Homes

 4) Mt. Washington Apts.

 5) Brodhead Apts. (Elderly)

 District IV

 1) Brighton Homes

 2) J. Edwards Site 1

 3) J. Edwards Site 2 (Elderly)

 4) Freedom Apts. Site 1

 5) Freedom Apts. Site 2

 6) T. Bishop Apts. (Elderly)

 7) Gordan Camp Site 1

 8) Gordan Camp Site 2 (Elderly)

 9) Monacatootha Apts. (Elderly)

 10) King Beaver Apts. (Elderly)

 District V

 1) Midcrest Homes

 2) Corak Towers (Elderly)

 The Consent Order establishes a target racial balance for all of the family projects, defined as the "percent of the total units owned, operated or managed by the [Housing Authority] that are occupied by Black families." Addendum to Consent Order, Exhibit "C," para. 1.A. Thus, racial imbalance is defined as "a situation where the percentage of Black or White families in a project is greater than the percentage of Black or White families in the total units owned, operated or managed by the Housing Authority of the County of Beaver." Consent Order, Exhibit "B," para. 6. The racial balance in a project is improved "whenever the Black/White ratio of any project moves closer to the Black/White ratio of the population of the entire housing authority. . . ." Id.

 The Housing Authority is directed to "equalize the racial balance" in its projects by giving priority in all projects to tenants whose move into a particular project would improve the racial balance of the project. In order to comply with this directive, the Housing Authority is required to process applications of all persons for occupancy of any of its dwelling units in the following manner: initially, the Housing Authority must determine the racial balance in each project. If the percentage of black occupied units in a project is greater than the percentage of black occupied units in all of the Housing Authority's units, then that project has a black racial imbalance and white applicants have priority for placement in that project. Conversely, if the percentage of black occupied units in a project is less than the percentage of black occupied units in the total units owned, operated and managed by the Housing Authority, then that project has a white racial imbalance and black applicants have priority for placement in that project. The Housing Authority must maintain a list showing the racial balance for each of its projects.

 When a unit becomes available, the Housing Authority must consult the project classification list to determine the racial balance of the project in which the unit is located, and also must determine the district in which the project is located. The Housing Authority then checks the applications file. Applications for housing are to be filed by district in chronological order by race and unit size requirements. "Depending upon the racial imbalance in the project, an appropriate assignment will be attempted on the basis of the applicant's race." Addendum to Consent Order, Exhibit "C," para. III.B.1. The Housing Authority must offer the unit first to applicants in the racial group having priority for assignment in the project in which the vacant unit is located, in chronological order and within income and rent paying feasibility. If the applicant to whom the unit is offered refuses to accept the unit, his name is placed at the bottom of the waiting list. If a unit still remains vacant after offering the available unit to all applicants in the first priority category, then the Housing Authority must go outside of the district in which the unit is located and offer it in chronological order to all other members of the racial group that has priority, who qualify for the unit. Persons who refuse a unit outside of their district will not be placed at the bottom of the waiting list should they refuse. Finally, only after offering the unit to all qualified members of the preferred race in all districts may the Housing Authority offer the vacant unit to a member of the nonpreferred group.

 The Housing Authority admitted at trial that contrary to the express provisions of the Consent Order, it failed to offer units to members of the preferred race outside of the district in which the unit was located.

 A similar procedure is to be followed for tenant transfers. In other words, the Housing Authority should allow lateral transfer of tenants if it will further racial integration. In order to allow a transfer, the transfers must bring the existing racial imbalance in both projects involved closer to the projected racial balance target figure.

 The Consent Order made no provision for what was to transpire once the target goal was reached in any given project. However, the Housing Authority developed the practice, implicitly approved by the Commission, of maintaining an equilibrium such that if a target balance was reached, a white family moving out was to be replaced with a white family and a black family moving out was to be replaced with a black family.

 The only permissible exception to the tenant selection and assignment procedure just outlined is in the case of emergency placements. Should an applicant be in need of housing because of fire, flood, or other natural disaster or act of God, relocation due to eminent domain proceedings, legal condemnation by health or building authorities, or eviction, the Housing Authority may place that applicant in any vacant unit without regard to the effect of such placement on the racial balance of the project in which the unit is located, provided however, that no comparable units are available in any other Housing Authority project in which an emergency placement applicant would improve the racial balance. The Consent Order directs the Housing Authority to send documentation of the basis for any and all emergency placements to the Commission within ten days of the date of placement. Although the Housing Authority officials recorded the basis for each emergency placement in their own records, they failed to send the required documentation to the Commission for any of the emergency placements they made.

 C.) Plaintiffs' Claims

 Plaintiffs brought this action against the Beaver County Housing Authority, James F. Tress, John F. Phillips, and their agents, successors in office, and persons acting under their direction. Plaintiffs allege in their complaint, inter alia, that the tenant selection, assignment and transfer procedure adopted by the Housing Authority in the Consent Order violates the United States Constitution, as well as several federal statutes and a legal duty imposed by state law. A synopsis of the four-count amended complaint follows:

 1. Count I alleges a deprivation of plaintiffs' right to be free from racial discrimination in the making of contracts in violation of the Civil Rights Act of 1870, 42 U.S.C. § 1981 (1976), because of the Housing Authority's use of race as an absolute preference determinant.

 2. Count II alleges a deprivation of plaintiffs' right to be free from racial discrimination in the leasing of real property in violation of the Civil Rights Act of 1866, 42 U.S.C. § 1982 (1976 & Supp. IV 1980), because of the Housing Authority's use of race as an absolute preference determinant.

 3. Count III asserts a denial of due process and equal protection in violation of the Fifth and Fourteenth Amendments of the United States Constitution and section 1 of the Civil Rights Act of 1871, 42 U.S.C. § 1983 (1976 & Supp. IV 1980), because of the Housing Authority's denying or delaying access to public housing based on an applicant's race and income.

 In addition, Count III asserts violations of Title VI of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000d-2000d-6 (1976), Title VIII of the Civil Rights Act of 1968, 42 U.S.C. §§ 3601-3631 (1976 & Supp. IV 1980) and various other federal housing statutes and regulations of the Department of Housing and Urban Development ("HUD").

 4. Count IV asserts a pendent state claim for a violation of section 5(h) of the Pennsylvania Human Relations Act, Pa.Stat. Ann. tit. 43, §§ 951-63 (Purdon 1964).

 The plaintiffs seek both declaratory and injunctive relief: a declaration that the present tenant selection and waiting list procedures violate the various aforementioned laws and an injunction restraining the defendants from using race or income as absolute selection criteria. Plaintiffs also seek a court award of attorneys' fees in accordance with 42 U.S.C. § 1988.

 On July 24, 1979, the Pennsylvania Human Relations Commission filed a motion to intervene as a defendant pursuant to Fed. R. Civ. P. 24(a). The Commission sought to protect its "interest in preserving a race conscious remedy for amelioration of the segregative housing patterns found in Defendant Authority's projects." Intervenor-Defendant's Pretrial Statement at 4. On August 15, 1979, we granted the Commission's motion and added it as a defendant in the case.

 During the course of the trial, several disputes surfaced concerning the meaning of certain provisions of the Consent Order. The major disagreement between the parties to that Order involves the provisions relating to the target racial balance that was established for each of the Housing Authority's family projects. The Housing Authority contends that the Consent Order establishes a fixed target racial balance of 33% in minority occupied units. The Human Relations Commission, on the other hand, maintains that the Consent Order establishes a fluctuating target racial balance; the black/white ratio of each project must be annually recalculated and the target racial balance must be adjusted accordingly in order to reflect the changes in black/white demand for housing.

 That there is room for divergent interpretations of the target racial balance system becomes clear when one reads the Consent Order. On the one hand, paragraph 12 of Exhibit B provides that "the Respondent shall initially and annually calculate the Black/White ratio for the total housing authority operated units and the Black/White ratio for each separate project to determine the existence of racial imbalance and the directions of such imbalance in each project." On the other hand, paragraph 1.A. of Exhibit C establishes a target racial balance of 33%. The Commission asserts that the 33% figure reflected the initial calculation, but that pursuant to Exhibit A, that figure was to be adjusted each year following the annual recalculation. The Housing Authority claims that it intended for the goal to be fixed at 33% and understood the Commission to be in accord because the Commission never indicated to the Housing Authority that its use of a 33% figure each year was incorrect, despite the fact that the Authority sent its figures to the Commission annually and despite the fact that Commission staff had conducted compliance/monitoring sessions at the Authority's office.

 In Fox v. HUD, 680 F.2d 315 (3d Cir. 1982), the Third Circuit set forth the rules that a district court must follow in dealing with a controversy over the implementation of a consent decree. "The scope of a consent decree must be discerned within its four corners, and not by reference to what might satisfy the purposes of one of the parties to it." Id. at 319, quoting, United States v. Armour & Co., 402 U.S. 673, 682, 29 L. Ed. 2d 256, 91 S. Ct. 1752 (1971). This rule is consistent with ordinary rules of contract construction that resort to extrinsic evidence is permissible only when the instrument itself is ambiguous. Thus, a district court first must determine whether the consent decree requires extrinsic evidence in aid of its interpretation. If extrinsic evidence is admitted, the ambiguity in the consent order must be treated as a question of fact to be resolved by the fact finder, except where the evidence and resulting inferences are uncontroverted. Fox v. HUD, 680 F.2d at 319.

 We believe that it is unnecessary for us to discern what the parties intended with respect to the target racial balance, or indeed, whether there was ever even a "meeting of the minds," because we conclude, for reasons set forth below, that the tenant selection and assignment plan that the defendants established is constitutionally and statutorily infirm regardless of whether the target racial balance is a fixed or a fluctuating percentage. Furthermore, because we strike down the plan, we need not resolve the other disagreements between the defendants concerning some of the less central provisions of the Consent Order.

 Before proceeding to the merits of the case, the following chart, representing the changes in the racial composition of the Housing Authority's projects since the inception of the new tenant selection and assignment plan, provides a useful background. As the chart reflects, significant changes in racial composition have occurred in the defendant's projects, particularly, whether or not by coincidence, after the plaintiffs filed this suit in 1978. *fn2" District/Project 1975 1976 1977 1978 1979 1980 1981 District I % Black Family Occupied Linmar Terrace (F) 31% 31% 34% 33% 33% 32% 32% Griffith Heights (F) 100 100 100 100 100 100 92 Linmar Terrace Extension 38 45 49 49 49 42 41 E. Roosevelt Apts. (F) 35 40 23(F& 46 22(F & 37 33 E. Roosevelt Apts. (E) 17 17 E) 11 E) 21 -- Sheffield Towers (E) 17 17 16 15 15 13 -- District II Economy Village (F) 7 7 8 8 10 24 29 Crestview Village (F) 12 12 10 15 16 28 33 J.F. Kennedy Apts. (F) 16 16 15 16 18 15 15 Ambridge Towers (E) 2 2 2 2 2 2 -- District III Morado Dwellings (F) 26 18 18 20 18 27 31 Harmony Dwellings (F) 98 98 98 98 98 94 90 Pleasantview Homes (F) 11 15 20 22 23 32 27 Mt. Wash. Apts. (F) 75 72 80 77 80 77 77 Brodhead Apts. (E) 0 0 1 0 1 2 -- District IV Brighton Homes (F) 29% 31% 31% 29% 31% 31% 31% J. Edwards (F) 18 27 12(F& 31 12(F& 32 32 J. Edwards (E) 3 0 E) 0 E) 0 -- Freedom Apts. (F) 17 43 40(F& 43 25(F 40 43 Freedom Apts. (E) 7 10 E) 6 E) 3 -- T. Bishop Apts. (E) 3 2 3 3 3 3 -- Gordon Camp Site 1(F) 33 33 15(F& 26 16(F& 37 33 Gordon Camp Site 2(E) 3 6 E) 6 E) 7 -- Monacatootha Apts. (E) 0 0 0 0 0 0 -- King Beaver Apts. (E) 3 3 3 3 3 3 -- District V Midcrest Homes (F) 57 50 48 50 55 52 43 Corak Towers (E) 28 26 28 26 26 24 --

19820820

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