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BIEKARCK v. WARREN-FOREST CTYS. ECONOMIC OPPORTUNI

November 23, 1983

JOHN C. BIEKARCK Plaintiff
v.
WARREN-FOREST COUNTIES ECONOMIC OPPORTUNITY COUNCIL, INC., Defendant



The opinion of the court was delivered by: WEBER

[EDITOR'S NOTE: The following court-provided text does not appear at this cite in 574 F. Supp.]

 ORDER

 AND NOW THIS 23 day of November, 1983, the Motion of Defendant to Dismiss is GRANTED, and the action is hereby DISMISSED in accordance with the accompanying Opinion.

 This case presents an interesting combination of questions on federal jurisdiction, standing to sue, and private causes of action.

 Plaintiff is the owner of an established mercantile business in Warren, Pennsylvania. The defendant is a non-profit organization formed to foster economic development in the two-county area. To revitalize the Warren downtown commercial area, defendant, along with two similar non-profit organizations, acquired a large building which was renovated and remodeled to make it suitable for several small businesses. The declared goal of this enterprise was to attract new businesses and jobs to downtown Warren without displacing existing businesses.

 One of the three joint ventures in this enterprise is Uniform Region Nine Certified Development Company (U.R.9) which pledged a contribution of $53,625 of equity capital to the project. This capital contribution of U.R.9 is derived from a grant to U.R.9 from the Appalachian Regional Commission, a federal agency, for use in this project. The plaintiff contends that this use of the funds is prohibited by the provisions of the Appalachian Regional Development Act of 1965, as amended, 40 U.S.C. App. § 1. Plaintiff claims that this alleged illegal use of the federal grant injures him in his business because it subsidizes competing business enterprises under conditions in which he and similar local merchants are barred.

 Plaintiff brought suit in the Common Pleas Court of Warren County, Pennsylvania, stating a cause of action under the Appalachian Regional Development Act, 40 U.S.C. App. § 1. He named as the sole defendant the Warren-Forest Counties Economic Opportunity Council, Inc., which held title to the real estate involved.

 Upon removal defendant filed a motion to dismiss on the grounds that (1) the Appalachian Regional Development Act does not create a private cause of action; (2) plaintiff lacks standing to bring this action; and (3) plaintiff has failed to join indispensable parties.

 Plaintiff filed a motion to remand the action to the state court, but now concedes jurisdiction in this court. Jurisdiction, having been established by the face of the complaint, is not defeated by a later determination of no cause of action. This is a judgment on the merits and is only decided after the court has assumed jurisdiction. Bell v. Hood, 327 U.S. 678, 90 L. Ed. 939, 66 S. Ct. 773 (1946).

 Congress passes a lot of laws each session, but the violation of the provisions of any federal statute does not automatically give a right to sue to any person alleging injury by reason of the violation. Cannon v. University of Chicago, 441 U.S. 677, 60 L. Ed. 2d 560, 99 S. Ct. 1946 (1979); Lechtner v. Brownyard, 679 F.2d 322 (3d Cir. 1982): United States v. F.M.C., 717 F.2d 775 (3d Cir. 1983).

 A statute may create a private cause of action by express terms, such as "any person claiming injury because of a violation of any provision of this act may bring suit in the United States District Court." There is no such provision in this Act.

 Many cases have construed statutes as creating an implied private cause of action. In Cort v. Ash, 422 U.S. 66, 45 L. Ed. 2d 26, 95 S. Ct. 2080 (1976) the Supreme Court set four standards for ...


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